ASSAM ELECTRICITY REGULATORY COMMISSION (AERC)aerc.gov.in/TariffOrder-AEGCL-2019-20.pdf · 2019. 3....
Transcript of ASSAM ELECTRICITY REGULATORY COMMISSION (AERC)aerc.gov.in/TariffOrder-AEGCL-2019-20.pdf · 2019. 3....
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ASSAM ELECTRICITY REGULATORY COMMISSION
(AERC)
TARIFF ORDER
March 01, 2019
True-Up for FY 2017-18, APR for FY 2018-19, ARR
for the Control Period from FY 2019-20 to FY 2021-
22 and Tariff for FY 2019-20 for AEGCL
and
ARR for the Control Period from FY 2019-20 to FY
2021-22 and Tariff for FY 2019-20 for SLDC
Assam Electricity Grid Corporation Limited
(AEGCL)
Petition No. 15/2018
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Table of Contents
1 INTRODUCTION .................................................................................................................... 10
1.1 CONSTITUTION OF THE COMMISSION .......................................................................................... 10
1.2 TARIFF RELATED FUNCTIONS OF THE COMMISSION ......................................................................... 10
1.3 BACKGROUND ....................................................................................................................... 11
1.4 MULTI YEAR TARIFF REGULATIONS, 2015 ................................................................................... 11
1.5 MULTI YEAR TARIFF REGULATIONS, 2018 ................................................................................... 12
1.6 PROCEDURAL HISTORY ............................................................................................................ 14
1.7 STATE ADVISORY COMMITTEE MEETING...................................................................................... 16
2 SUMMARY OF AEGCL’S PETITION .......................................................................................... 17
2.1 BACKGROUND ....................................................................................................................... 17
2.2 INTEREST AND FINANCE CHARGES FOR FY 2016-17 ....................................................................... 17
2.3 TRUE-UP FOR FY 2017-18 ....................................................................................................... 17
2.4 ANNUAL PERFORMANCE REVIEW OF FY 2018-19 ......................................................................... 19
2.5 MULTI YEAR TARIFF DETERMINATION FOR FY 2019-20 TO FY 2021-22 ............................................ 20
2.6 PRAYERS OF AEGCL ............................................................................................................... 21
3 BRIEF SUMMARY OF OBJECTIONS RAISED, RESPONSE OF THE AEGCL AND COMMISSION’S
COMMENTS ............................................................................................................................... 22
OBJECTIONS .................................................................................................................................. 26
4 REVIEW OF TRUE-UP FOR FY 2016-17 .................................................................................... 32
4.1 INTEREST AND FINANCE CHARGES FOR FY 2016-17 ....................................................................... 32
5 TRUING UP FOR FY 2017-18 .................................................................................................. 35
5.1 METHODOLOGY FOR TRUING UP ............................................................................................... 35
5.2 TRANSMISSION LOSS .............................................................................................................. 36
5.3 REVENUE FROM OPERATIONS ................................................................................................... 36
5.4 NON-TARIFF INCOME ............................................................................................................. 37
5.5 PGCIL CHARGES .................................................................................................................... 37
5.6 O&M EXPENSES ................................................................................................................... 38
5.7 SLDC CHARGES ..................................................................................................................... 43
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5.8 CAPITAL EXPENDITURE AND CAPITALISATION ................................................................................ 43
5.9 DEPRECIATION ...................................................................................................................... 44
5.10 INTEREST AND FINANCE CHARGES .............................................................................................. 46
5.11 RETURN ON EQUITY................................................................................................................ 47
5.12 INTEREST ON WORKING CAPITAL (IOWC) .................................................................................... 48
5.13 OTHER DEBITS ...................................................................................................................... 48
5.14 BST FOR PENSION FUND (SPECIAL CHARGES FOR TERMINAL BENEFITS) ............................................... 49
5.15 NET PRIOR PERIOD EXPENSES/(INCOME) ..................................................................................... 49
5.16 INCOME TAX......................................................................................................................... 50
5.17 INCENTIVE FOR TRANSMISSION AVAILABILITY ............................................................................... 51
5.18 ARR AFTER TRUING UP OF FY 2017-18 ..................................................................................... 52
6 ANNUAL PERFORMANCE REVIEW FOR FY 2018-19 ................................................................. 54
6.1 METHODOLOGY FOR ANNUAL PERFORMANCE REVIEW ................................................................... 54
6.2 TRANSMISSION LOSS .............................................................................................................. 55
6.3 TRANSMISSION AVAILABILITY ................................................................................................... 55
6.4 NON-TARIFF INCOME ............................................................................................................. 56
6.5 PGCIL CHARGES .................................................................................................................... 56
6.6 OPERATION AND MAINTENANCE EXPENSES .................................................................................. 57
6.7 SLDC CHARGES ..................................................................................................................... 60
6.8 CAPITAL EXPENDITURE AND CAPITALISATION ................................................................................ 61
6.9 DEPRECIATION ...................................................................................................................... 61
6.10 INTEREST AND FINANCE CHARGES .............................................................................................. 63
6.11 RETURN ON EQUITY................................................................................................................ 64
6.12 INTEREST ON WORKING CAPITAL (IOWC) .................................................................................... 64
6.13 BST FOR PENSION FUND ......................................................................................................... 65
6.14 INCOME TAX......................................................................................................................... 65
6.15 OTHER DEBITS, PRIOR PERIOD EXPENSES/(INCOME), AND INCENTIVE ................................................. 66
6.16 ARR AFTER ANNUAL PERFORMANCE REVIEW OF FY 2018-19 .......................................................... 66
6.17 REVENUE GAP/(SURPLUS) FOR FY 2018-19 ................................................................................ 67
7 CAPITAL INVESTMENT PLAN OF AEGCL FOR FY 2019-20 TO FY 2021-22 .................................. 69
7.1 CAPITAL INVESTMENT PLAN OF AEGCL ....................................................................................... 69
7.2 ASIAN DEVELOPMENT BANK (ADB) SCHEME ................................................................................ 69
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7.3 POWER SYSTEM DEVELOPMENT FUND (PSDF) ............................................................................. 71
7.4 TRADE DEVELOPMENT FUND (TDF) ........................................................................................... 71
7.5 ANNUAL PLAN ...................................................................................................................... 72
7.6 NERPSIP ............................................................................................................................ 74
7.7 NEC ................................................................................................................................... 75
7.8 OTHER CAPITAL PROJECTS ....................................................................................................... 76
7.9 SUMMARY OF CAPITAL EXPENDITURE AND CAPITALISATION ............................................................. 76
7.10 CAPITAL INVESTMENT PLAN APPROVED BY THE COMMISSION FOR FY 2019-20 TO FY 2021-22 ............... 77
7.11 CAPITALISATION APPROVED BY THE COMMISSION FOR FY 2019-20 TO FY 2021-22 ............................. 80
8 ARR FOR AEGCL FOR THE MYT CONTROL PERIOD FROM FY 2019-20 TO FY 2021-22 ................ 83
8.1 INTRODUCTION ..................................................................................................................... 83
8.2 TRANSMISSION LOSS .............................................................................................................. 83
8.3 TRANSMISSION AVAILABILITY ................................................................................................... 84
8.4 OPERATION AND MAINTENANCE EXPENSES .................................................................................. 84
8.5 CAPITAL EXPENDITURE AND CAPITALISATION ................................................................................ 89
8.6 DEPRECIATION ...................................................................................................................... 90
8.7 INTEREST ON LOAN CAPITAL ..................................................................................................... 93
8.8 RETURN ON EQUITY................................................................................................................ 94
8.9 INTEREST ON WORKING CAPITAL ............................................................................................... 95
8.10 PGCIL CHARGES .................................................................................................................... 95
8.11 INCOME TAX......................................................................................................................... 96
8.12 OTHER DEBITS ...................................................................................................................... 96
8.13 BST FOR PENSION FUND ......................................................................................................... 96
8.14 NON-TARIFF INCOME ............................................................................................................. 97
8.15 SUMMARY OF ARR FOR CONTROL PERIOD FROM FY 2019-20 TO FY 2021-22 .................................... 98
9 ARR FOR SLDC FOR MYT CONTROL PERIOD FROM FY 2019-20 TO FY 2021-22 ....................... 100
9.1 INTRODUCTION ................................................................................................................... 100
9.2 MULTI YEAR TARIFF DETERMINATION FOR FY 2019-20 TO FY 2021-22 .......................................... 100
10 TRANSMISSION TARIFF FOR FY 2019-20 .............................................................................. 104
10.1 CUMULATIVE REVENUE GAP/(SURPLUS) AND NET ARR FOR RECOVERY ............................................ 104
10.2 TRANSMISSION TARIFF FOR FY 2019-20 ................................................................................... 105
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11 ANNUAL SLDC CHARGES FOR FY 2019-20 ............................................................................. 108
11.2 APPLICABILITY OF TARIFF ....................................................................................................... 108
12 DIRECTIVES ........................................................................................................................ 109
ANNEXURE-1 ........................................................................................................................... 114
24TH MEETING OF THE STATE ADVISORY COMMITTEE........................................................................... 114
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List of Abbreviations
A&G Administrative and General
ABITA Assam Branch of Indian Tea Association
ADB Asian Development Bank
AEGCL Assam Electricity Grid Corporation Limited
AERC Assam Electricity Regulatory Commission
APDCL Assam Power Distribution Company Limited
APGCL Assam Power Generation Corporation Limited
APTEL Appellate Tribunal for Electricity
ARR Aggregate Revenue Requirement
AS Accounting Standards
ASEB Assam State Electricity Board
BST Bulk Supply Tariff
CAG/C&AG Comptroller and Auditor General
CEA Central Electricity Authority
CERC Central Electricity Regulatory Commission
CPC Central Pay Commission
CPI Consumer Price Index
CSGS Central Sector Generating Stations
CTU Central Transmission Utility
CWIP Capital Work-In-Progress
DA Dearness Allowance
DISCOM Distribution Company
EAP Externally Aided Projects
EPFI Employees’ Pension Fund Investment
FAR Fixed Asset Register
FCC Financial Completion Certificate
FINER Federation of Industry & Commerce of North Eastern Region
FIRR Financial Internal Rate of Return
GFA Gross Fixed Assets
GoA Government of Assam
GPF General Provident Fund
H1 First Half of the year
H2 Second Half of the year
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HRA House Rent Allowance
IWC/IoWC Interest on Working Capital
kW kilo Watt
kWh kilo Watt Hour
LTA Leave Travel Allowance
MCA Ministry of Corporate Affairs
MU Million Units
MW Mega Watt
MYT Multi Year Tariff
NERLDC North Eastern Region Load Despatch Centre
NTPC NTPC Ltd.
O&M Operation and Maintenance
PCC Physical Completion Certificate
PGCIL Power Grid Corporation of India Limited
PoC Point of Connection
R&M Repairs and Maintenance
RoE Return on Equity
ROI Rate of Interest
RLDC Regional Load Despatch Centre
ROP Revision of Pay
SAC State Advisory Committee
SBI State Bank of India
SLDC State Load Despatch Centre
SLM Straight Line Method
STOA Short Term Open Access
STU State Transmission Utility
TSC Transmission Service Charges
TVS Technical Validation Session
UPPCL Uttar Pradesh Power Corporation Ltd.
WPI Wholesale Price Index
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ASSAM ELECTRICITY REGULATORY COMMISSION
Guwahati
Present
Shri Subhash C. Das, Chairperson
Shri Dipak Chakravarty, Member
Petition No. 15/2018
Assam Electricity Grid Corporation Limited (AEGCL) - Petitioner
ORDER
(Passed on March 01, 2019)
(1) AEGCL filed Petition for approval of Truing up for FY 2017-18 and Annual Performance
Review (APR) for FY 2018-19 for AEGCL, and Aggregate Revenue Requirement
(ARR) for FY 2019-20 to FY 2021-22 and determination of Tariff for FY 2019-20 for
AEGCL and SLDC as per MYT Regulations, 2018 on November 30, 2018. The same
was registered as Petition No. 15/2018.
(2) The Commission held an Admissibility Hearing on December 10, 2018, and admitted
the Petition (Petition No.15/2018) vide Order dated December 10, 2018 with direction
to furnish the additional data and clarifications, as sought vide letter dated December
10, 2018. Based on preliminary comments of the Commission, AEGCL revised the
original Petition and submitted the revised Petition (Petition No. 15/2018) on December
15, 2018.
(3) On admission of the Petitions (Petition No. 15/2018), in accordance with Section 64 of
the Electricity Act 2003, the Commission directed AEGCL to publish a summary of the
ARR and Tariff filings in local dailies to facilitate due public participation
(4) In accordance with Section 64 of the Electricity Act 2003, the Commission directed
AEGCL to publish a summary of the ARR and Tariff filings in local dailies to ensure
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due public participation. A copy of the Petition and other relevant documents were also
made available to the consumers and other interested Parties at the office of the
Managing Director of AEGCL, and offices of the Deputy General Manager of each
circle of AEGCL. A copy of the Petition was also made available on the websites of the
Commission and AEGCL.
(5) Accordingly, a Public Notice was issued by the AEGCL inviting objections/suggestions
from respondents to be submitted on or before January 11, 2019. The notice was
published in six (6) leading newspapers of the State on December 18, 2018.
Date Name of Newspaper Language
18.12.2018
The Sentinel English
The Assam Tribune English
Asamiya Pratidin Assamese
Dainik Janambhumi Assamese
Purbanchal Prahari Hindi
Dainik Jugasankha Bengali
(6) In response to the Commission’s letter dated December 10, 2018, AEGCL submitted
their replies on December 26, 2018.
(7) The Commission observed that there were several inconsistencies and discrepancies
even in the revised Petition and the replies to the first set of queries submitted by
AEGCL. Accordingly, the Commission raised second set of queries on January 31,
2019 in order to clarify the discrepancies, inconsistencies, and data gaps, and directed
AEGCL to submit the consolidated revised documents in order to avoid confusion.
AEGCL submitted its reply to the second set of queries on February 5, 2019. However,
AEGCL did not submit the duly reconciled consolidated revised documents, and the
replies to queries also contained inconsistencies.
(8) The Petition was also discussed in the meeting of the State Advisory Committee (SAC)
(constituted under Section 87 of the Electricity Act, 2003) held on February 5, 2018 at
Assam Administrative Staff College, Khanapara, Guwahati.
(9) The Commission received suggestions/objections from three (3) stakeholders on the
Petitions filed by AEGCL. The stakeholders were notified about the place, date and
time of Hearing, to enable them to take part in the Hearing. A News Paper notice was
also published inviting participation from the General Public as well as the
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Respondents. The Hearing was held at Assam Administrative Staff College, Guwahati
on February 12, 2019 as scheduled. All stakeholders/respondents who participated in
the Hearing were given the opportunity to express their views on the Petitions. The
details are discussed in the relevant Chapters of this Tariff Order.
(10) The Commission, now in exercise of its powers vested under Sections 61, 62, 86 and
181 of the Electricity Act, 2003 and all other powers enabling it in this behalf and taking
into consideration the submissions made by the Petitioner, objections and suggestions
received from stakeholders and all other relevant materials on record, has approved
the True up for FY 2017-18 and APR for FY 2018-19 for AEGCL, and ARR for FY
2019-20 to FY 2021-22, and determined the Transmission Tariff and SLDC Charges
for FY 2019-20 as detailed in subsequent pages.
(11) The Commission directs AEGCL to publish a Public Notice intimating the revised
Transmission Tariff and SLDC Charges before the implementation of this Order in
English and Vernacular newspapers and on the website of AEGCL.
(12) The approved Transmission Tariff and SLDC Charges shall be effective from April 1,
2019 and shall continue until replaced by another Order by the Commission.
(13) Accordingly, the Petition Nos. 15/2018 stand disposed of.
Sd/-
(D. Chakravarty)
Member, AERC
Sd/-
(S. C. Das)
Chairperson, AERC
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1 INTRODUCTION
1.1 Constitution of the Commission
1.1.1 The Assam Electricity Regulatory Commission (hereinafter referred to as the AERC or
the Commission) was established under the Electricity Regulatory Commissions Act,
1998 (14 of 1998) on February 28, 2001. The first proviso of Section 82(1) of the
Electricity Act, 2003 (hereinafter referred as the Act or the EA, 2003) has ensured
continuity of the Commission under the Electricity Act, 2003.
1.1.2 The Commission is mandated to exercise the powers and functions conferred under
Section 181 of the Electricity Act, 2003 (36 of 2003) and to exercise the functions
conferred on it under Section 61, 62 and 86 of the Act from June 10, 2003.
1.2 Tariff related Functions of the Commission
1.2.1 Under Section 86 of the Act, the Commission has the following tariff related functions:
a) To determine the tariff for electricity, wholesale, bulk or retail, as the case may be;
b) To regulate power purchase and procurement process of the distribution utilities
including the price at which the power shall be procured from the generating
companies, generating stations or from other sources for transmission, sale,
distribution and supply in the State;
c) To promote competition, efficiency and economy in the activities of the electricity
industry to achieve the objects and purposes of this Act.
1.2.2 Under Section 61 of the Act in the determination of tariffs, the Commission is to be
guided by the following:
a) The principles and methodologies specified by the Central Commission for
determination of the tariff applicable to generating companies and transmission
licensees;
b) That the electricity generation, transmission, distribution and supply are conducted
on commercial principles;
c) That factors which would encourage efficiency, economical use of the resources,
good performance, optimum investments, and other matters which the State
commission considers appropriate for the purpose of this Act;
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d) The interests of the consumers are safeguarded and at the same time, the
consumers pay for the use of electricity in a reasonable manner based on their
customer category cost of supply;
e) That the tariff progressively reflects the cost of supply of electricity at an adequate
and improving level of efficiency and also gradually reduces cross subsidies;
f) The National Power Plans formulated by the Central Government including the
National Electricity Policy and Tariff Policy.
1.3 Background
1.3.1 AEGCL is the successor corporate entity of erstwhile ASEB formed pursuant to the
notification of the Government of Assam, notified under sub-sections (1), (2), (5), (6)
and (7) of Section 131 and Section 133 of the Electricity Act 2003 (Central Act 36 of
2003), for the purpose of transfer and vesting of functions, properties, interests, rights,
obligations and liabilities, along with the transfer of personnel of the Board to successor
entries.
1.3.2 AEGCL owns and operates the transmission system previously owned by Assam State
Electricity Board (ASEB). AEGCL has started functioning as a separate entity from
December 10, 2004.
1.4 Multi Year Tariff Regulations, 2015
1.4.1 The Commission, in exercise of the powers conferred under Section 61 read with
Section 181(2) (zd) of the Act, has notified the Assam Electricity Regulatory
Commission (Terms and Conditions for determination of Multi Year Tariff) Regulations,
2015 (hereinafter referred as “MYT Regulations, 2015”) on June 2, 2015. These
Regulations are applicable for determination of Tariff for Generation, Transmission,
SLDC, Wheeling and Retail Supply for the Control Period of three financial years from
April 1, 2016 onwards up to March 31, 2019. These Regulations are applicable to all
existing and future Generating Companies, Transmission Licensees and Distribution
Licensees within the State of Assam.
1.4.2 AEGCL filed the MYT Petition for approval of ARR for the Control Period from FY 2016-
17 to FY 2018-19 and tariff for FY 2017-18 as per MYT Regulations, 2015, along with
True-up for FY 2014-15 and FY 2015-16 as per AERC (Terms and Conditions of Tariff)
Regulations, 2006 (herein after referred as “Tariff Regulations, 2006”).The
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Commission issued the Order on the said MYT Petition on March31, 2017 and
approved the Transmission Tariff for FY 2017-18.
1.4.3 Further, the Commission notified the AERC (Terms and Conditions for determination
of Multi Year Tariff) Regulations, 2015, First Amendment, 2017 on November 8, 2017.
In the said Regulations, certain provisions regarding the scope of Annual Performance
Review, rate of interest for consumer security deposit, etc., were amended.
1.4.4 Regulation 10 of the MYT Regulations, 2015, as amended in November 2017,
specifies that the Commission shall undertake the APR and True-up for the respective
years of the Control Period from FY 2016-17 to FY 2018-19, as reproduced below:
“10.3 The scope of the annual review and True up shall be a comparison of the actual
performance of the Generating Company or Transmission Licensee or SLDC or
Distribution Licensee with the approved forecast of Aggregate Revenue Requirement
and expected revenue from tariff and charges and shall comprise the following:
a) True Up: a comparison of the audited performance of the applicant for the
previous financial year with the approved forecast for the financial year and
truing up of expenses and revenue in line with Regulation 11including pass
through of impact of uncontrollable items;
b) Annual Review: a comparison of the revised performance targets of the
applicant for the current financial year with the approved forecast in the Tariff
order corresponding to the Control period for the current financial year subject
to prudence check including adjusting trajectories of uncontrollable and
controllable items”.
1.5 Multi Year Tariff Regulations, 2018
1.5.1 The Commission, in exercise of the powers conferred under Section 61 read with
Section 181(2) (zd) of the Act, notified the AERC (Terms and Conditions for
determination of Multi Year Tariff) Regulations, 2018 (herein after referred as “MYT
Regulations, 2018”) on July 17, 2018. These Regulations are applicable for
determination of Tariff for Generation, Transmission, SLDC, Wheeling and Retail
Supply for the Control Period of three financial years from April 1, 2019 onwards up to
March 31, 2022. These Regulations are applicable to all existing and future Generating
Companies, Transmission Licensees and Distribution Licensees within the State of
Assam.
1.5.2 Regulation 4.2 of the MYT Regulations, 2018, specifies the MYT framework, as
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reproduced below: “4.2 The Multi-Year Tariff framework shall be based on the following
elements, for calculation of Aggregate Revenue Requirement and expected revenue
from tariff and charges for Generating Companies, Transmission Licensee, SLDC,
Distribution Wheeling Business and Retail Supply Business:
(i) Before commencement of Control Period, a forecast of the Aggregate Revenue
Requirement and expected revenue from existing tariff and charges shall be submitted
by the applicant and approved by the Commission;
(ii) A detailed Capital Investment Plan for each year of the Control Period, shall be
submitted by the applicant for the Commission's approval;
(iii) The applicant shall submit operating norms and trajectories of performance
parameters for each year of the Control Period, for the Commission's approval;
(iv) The applicant shall submit the forecast of Aggregate Revenue Requirement and
expected revenue from existing tariff for each year of the Control Period, and the
Commission shall approve the tariff for Generating Companies, SLDC, Transmission
Licensee, Distribution Wheeling Business and Retail Supply Business, for each year
of the Control Period;
(v) In its tariff petition, a generating company shall submit information to support the
determination of tariff for each generating station
(vi) Annual Performance review vis-à-vis the approved forecast and categorization of
variation in performance as those caused by factors beyond the control of the applicant
(uncontrollable items) shall be undertaken by the Commission;
(vii) True up of the past years based on audited annual accounts of the licensees and
the Generation companies.
(viii) The mechanism for pass-through of approved gains or losses on account of
uncontrollable items as specified by the Commission in these Regulations;
(ix) The mechanism for sharing of approved gains or losses arising out of controllable
items as specified by the Commission in these Regulations;
(x) Tariff determination for Generating Companies, SLDC, Transmission Licensee and
Distribution Wheeling Business and Retail Supply Business, for each financial year
within the Control period based on the approved forecast. The tariff shall be reviewed
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at the time of the true-up and annual performance review.
(xi) There will be no true-up of the controllable items except on account of Force
Majeure events or on account of variations attributable to uncontrollable items. The
variations in the controllable items, as defined in regulation 10, over and above the
norms specified will be governed by incentive and penalty framework specified in these
regulations.
(xii) The tariff determined by the Commission and the directions given in the MYT order
shall be the quid pro quo and mutually inclusive. The tariff determined shall, within the
time period specified in the order, be subject to the compliance of the directions by the
generating company and the licensees to the satisfaction of the Commission. Non-
compliance of directions given in the tariff order may also lead to invocation of the
provisions of section 142 of the Act.
(xiii) The tariff determined by the Commission shall continue to operate till it is modified
or revised by the Commission.”
1.6 Procedural History
1.6.1 As per Regulation 4.2 of the MYT Regulations, 2018, AEGCL is required to file an
application for true-up for previous year, i.e., FY 2017-18, APR of current year, i.e., FY
2018-19, ARR for the Control Period from FY 2019-20 to FY 2021-22 and tariff for
ensuing year, i.e., FY 2019-20, not less than 120 days before the close of the current
year.
1.6.2 AEGCL filed Petition for approval of Truing up for FY 2017-18 and Annual Performance
Review (APR) for FY 2018-19 for AEGCL, and Aggregate Revenue Requirement
(ARR) for FY 2019-20 to FY 2021-22 and determination of Tariff for FY 2019-20 for
AEGCL and SLDC as per MYT Regulations, 2018 on November 30, 2018. The same
was registered as Petition No. 15/2018.
1.6.3 The Commission held an Admissibility Hearing on December 10, 2018, and admitted
the Petition (Petition No.15/2018) vide Order dated December 10, 2018 with direction
to furnish the additional data and clarifications, as sought vide letter dated December
10, 2018. Based on preliminary comments of the Commission, AEGCL revised the
original Petition and submitted the revised Petition (Petition No. 15/2018) on December
15, 2018.
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1.6.4 On admission of the Petitions (Petition No. 15/2018), in accordance with Section 64 of
the Electricity Act 2003, the Commission directed AEGCL to publish a summary of the
ARR and Tariff filings in local dailies to facilitate due public participation
1.6.5 In accordance with Section 64 of the Electricity Act 2003, the Commission directed
AEGCL to publish a summary of the ARR and Tariff filings in local dailies to ensure
due public participation. A copy of the Petition and other relevant documents were also
made available to the consumers and other interested Parties at the office of the
Managing Director of AEGCL, and offices of the Deputy General Manager of each
circle of AEGCL. A copy of the Petition was also made available on the websites of the
Commission and AEGCL.
1.6.6 Accordingly, a Public Notice was issued by the AEGCL inviting objections/suggestions
from respondents to be submitted on or before January 11, 2019. The notice was
published in six (6) leading newspapers of the State on December 18, 2018.
Date Name of Newspaper Language
18.12.2018
The Sentinel English
The Assam Tribune English
Asamiya Pratidin Assamese
Dainik Janambhumi Assamese
Purbanchal Prahari Hindi
Dainik Jugasankha Bengali
1.6.7 In response to the Commission’s letter dated December 10, 2018, AEGCL submitted
their replies on December 26, 2018.
1.6.8 The Commission observed that there were several inconsistencies and discrepancies
even in the revised Petition and the replies to the first set of queries submitted by
AEGCL. Accordingly, the Commission raised second set of queries on January 31,
2019 in order to clarify the discrepancies, inconsistencies, and data gaps, and directed
AEGCL to submit the consolidated revised documents in order to avoid confusion.
AEGCL submitted its reply to the second set of queries on February 5, 2019. However,
AEGCL did not submit the duly reconciled consolidated revised documents, and the
replies to queries also contained inconsistencies.
1.6.9 The Petition was also discussed in the meeting of the State Advisory Committee (SAC)
(constituted under Section 87 of the Electricity Act, 2003) held on February 5, 2018 at
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Assam Administrative Staff College, Khanapara, Guwahati.
1.6.10 The Commission received suggestions/objections from three (3) stakeholders on the
Petitions filed by AEGCL. The stakeholders were notified about the place, date and
time of Hearing, to enable them to take part in the Hearing. A News Paper notice was
also published inviting participation from the General Public as well as the
Respondents. The Hearing was held at Assam Administrative Staff College, Guwahati
on February 12, 2019 as scheduled. All stakeholders/respondents who participated in
the Hearing were given the opportunity to express their views on the Petitions.
1.6.11 All the written representations submitted to the Commission and oral submissions
made before the Commission in the Hearing and the responses of AEGCL have been
carefully considered while issuing this Tariff Order. The major issues raised by different
consumers and consumer groups along with the response of AEGCL, and views of the
Commission are elaborated in Chapter 3 of this Order.
1.7 State Advisory Committee Meeting
1.7.1 A meeting of the State Advisory Committee (SAC)(constituted under Section 87 of the
Act) was convened on February 5, 2019 and members were briefed on the MYT
Petition of AEGCL. The Minutes of the SAC Meeting are appended to this Order as
Annexure 1.
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2 Summary of AEGCL’s Petition
2.1 Background
2.1.1 AEGCL submitted the Petition on November 30, 2018 seeking approval for Aggregate
Revenue Requirement and determination of Transmission Charges for the Control
Period from FY 2019-20 to 2021-22 along with True up for FY 2017-18. The
Transmission Charges are to be recovered from the Assam Power Distribution
Company Limited (APDCL), IPPs and other generators, traders and others who utilize
the transmission system.
2.2 Interest and Finance Charges for FY 2016-17
2.2.1 AEGCL submitted that the actual net normative loan should be Rs. 255.57crore as
against ‘Nil’ approved in True-up of FY 2016-17. AEGCL submitted that the Interest
and Finance charges for FY 2016-17 should be Rs. 25.95 Crore as against ‘Nil’
approved by the Commission in the Tariff Order dated March 19, 2018. AEGCL
requested the Commission to allow the Interest and Finance Charges of Rs.25.95
crore in the consolidated ARR of FY 2019-20.
2.3 True-up for FY 2017-18
2.3.1 AEGCL submitted the True-up for FY 2017-18 based on the audited accounts. The
summary of Aggregate Revenue Requirement (ARR) and Revenue Gap/(Surplus)
claimed by AEGCL for FY 2017-18 is shown in the following Table:
Table 1: True-up for FY 2017-18 as submitted by AEGCL (Rs. Crore)
Sl.
No. Particulars
Approved in
MYT Order
AEGCL
Submission
1 PGCIL Charges 534.55 509.29
2 O&M Expenses 175.97 170.20
A Employee Cost 152.25 142.33
B R&M Expenses 16.26 18.94
C A&G Expenses 7.45 8.92
3 SLDC Charges 2.60 2.56
4 Depreciation 17.07 21.71
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Sl.
No. Particulars
Approved in
MYT Order
AEGCL
Submission
5 Interest & Finance Charges 9.41 25.02
6 Interest on Working Capital 23.92 27.52
7 BST for Pension Trust Fund 181.52 172.10
8 Return on Equity 16.01 15.49
9 Income Tax - 8.80
10 Other debits - 0.90
11 Net Prior period Charges/(Credits) - (5.68)
12 Less: Non-Tariff Income/ Other Income 85.99 195.76
13 Aggregate Revenue Requirement 875.06 752.14
14
Add: Revenue Gap/(Surplus) after Truing up for FY
2014-15 along with carrying cost approved in MYT
Order
7.43 7.43
15
Add: Revenue Gap/(Surplus) after Truing up for FY
2015-16 along with carrying cost approved in MYT
Order
169.15 169.15
16
Add: Revenue Gap/(Surplus) after Truing up for FY
2016-17 along with carrying cost approved in MYT
Order for recovery in FY 2017-18 and FY 2018-19
143.35 143.35
17
Less: Transmission incentive credit bill raised to
APDCL as per observation of AG Audit for the FY
2017-18
0 6.39
18
Add: Credit bill raised to APDCL for excess amount
of Transmission surcharge billed to APDCL during
FY 2017-18, as per observation of AG Audit for the
FY 2017-18
0 37.31
19 Net Aggregate Revenue Requirement 1,194.99 1,102.99
20 Incentive on Transmission Availability - 12.10
21 Add: Sharing of (Gains)/Loss - (1.50)
22 ARR after Sharing (Gains)/Losses and Incentive 1,194.99 1,113.59
23 Revenue with Approved Tariff for FY 2017-18 1,194.99 1,194.99
24 Revenue Gap /(Surplus) for FY 17-18 (0.00) (81.40)
19
2.4 Annual Performance Review of FY 2018-19
2.4.1 AEGCL submitted the APR of FY 2018-19 based on the actual expenses incurred in
the first half of FY 2018-19, as shown in the Table below:
Table 2: Annual Performance Review for FY 2018-19 (Rs. Crore)
Sl.
No. Particulars
Approved
in T.O. dtd
19.03.18
FY 18-19
H1
FY 18-19
H2
AEGCL
Estimation
1 PGCIL Charges 526.33 255.80 255.84 511.64
2 O&M Expenses 183.79 100.33 95.02 195.36
A Employee Cost 158.89 91.41 79.53 170.94
B R&M Expenses 18.00 5.05 10.08 15.13
C A&G Expenses 6.90 3.87 5.42 9.29
3 SLDC Charges 3.61 1.54 1.95 3.49
4 Impact of Revision of Pay 25.30 - - -
5 Depreciation 26.29 9.89 9.89 19.79
6 Interest & Finance Charges 7.01 12.55 14.02 26.57
7 Interest on Working Capital 30.63 14.44 14.38 28.82
8 BST for Pension Trust Fund 187.22 94.90 94.90 189.80
9 Return on Equity 16.86 7.74 7.74 15.49
10 Income Tax - - - -
11 Other debits - 0.00 0.00 0.01
12 Net Prior period Charges/(Credits) - (1.31) - (1.31)
13 Less: Non-Tariff Income/ Income 100.17 53.12 46.30 99.41
14 Aggregate Revenue Requirement 906.87 442.78 447.46 890.24
15
Add: Revenue Gap/(Surplus) after
Truing up for FY 2016-17 along with
carrying cost approved in MYT
Order for recovery in FY 2017-18
and FY 2018-19
188.00 94.00 94.00 188.00
16 Carrying Cost 65.77 32.89 32.89 65.77
17 Net Aggregate Revenue
Requirement 1,160.64 569.66 574.34 1,144.01
18 Incentive on Trans. Availability - 2.83 2.83 5.67
19 Add: Sharing of (Gains)/Loss - - - -
20
Sl.
No. Particulars
Approved
in T.O. dtd
19.03.18
FY 18-19
H1
FY 18-19
H2
AEGCL
Estimation
20 ARR after Sharing (Gains)/Losses 1,160.64 572.50 577.18 1,149.68
21 Revenue with Approved Tariff for
FY 2018-19 1,160.64 580.35 580.35 1,160.70
22 Revenue Gap/(Surplus) for FY
2018-19 - (7.85) (3.17) (11.02)
2.5 Multi Year Tariff Determination for FY 2019-20 to FY 2021-22
2.5.1 AEGCL has projected the ARR of Rs. 502.75 Crore for FY 2019-20, Rs. 585.45 Crore
for FY 2020-21, and Rs. 702.93 Crore for FY 2021-22 as detailed in the Table below:
Table 3: ARR for FY 2019-20 to FY 2021-22as submitted by AEGCL
Sl. Particulars FY 2019-
20
FY 2020-
21
FY 2021-
22
1 PGCIL Charges 0.00 0.00 0.00
2 O&M Expenses 214.79 232.16 254.81
A Employee Cost 181.18 194.58 208.98
B R&M Expenses 20.71 26.64 34.86
C A&G Expenses 10.90 10.94 10.97
D Training Expenses 2.00 0.00 0.00
3 SLDC Charges 0.00 0.00 0.00
4 Depreciation 43.34 80.95 128.91
5 Interest & Finance Charges 33.48 39.67 54.59
6 Interest on Working Capital 15.40 17.45 20.31
7 BST for Pension Trust Fund 201.38 213.90 227.44
8 Return on Equity 19.68 27.89 44.76
9 Less: Non-Tariff Income 25.31 26.57 27.89
10 Aggregate Revenue Requirement 502.75 585.45 702.93
2.5.2 AEGCL has also submitted the ARR for SLDC for the Control Period, as shown in the
21
following Table:
Table 4: ARR of State Load Despatch Centre (SLDC) for FY 2019-20 to FY 2021-22 as
submitted by AEGCL (Rs. Crore)
Particulars FY 2019-20 FY 2020-21 FY 2021-22
O&M Expenses 6.33 7.61 9.16
Employee Cost 4.64 5.92 7.55
Repair and Maintenance Expenses 0.48 0.48 0.49
Administrative and General Expenses 1.21 1.22 1.12
Training Expenses 0.25 - -
Depreciation 0.03 0.12 0.16
Interest & Finance Charges 0.09 0.13 0.25
Interest on Working Capital 0.29 0.35 0.42
Return on Equity 0.01 0.05 0.14
Less: Non-Tariff Income 0.85 0.89 0.93
ARR of SLDC 6.15 7.37 9.20
2.6 Prayers of AEGCL
2.6.1 AEGCL, in its Petition, has prayed as under:
“
(i) Accept the Annual Revenue Requirements and Tariff proposal for
Transmission Business respectively in accordance with:
a. The guidelines outlined in AERC Orders passed in various matters
relating to AEGCL; and
b. The principles contained in AERC (Terms and Conditions for
determination of Tariff) Regulations 2015;
(ii) Condone any inadvertent omissions/errors/rounding off differences/
shortcomings and permit AEGCL to add/ change/ modify/ alter this filing and
make further submissions as may be required at a future date.
(iii) Pass such further and other Orders, as the Commission may deem fit and
proper, keeping in view the facts and circumstances of the case.”
22
3 Brief Summary of Objections Raised, Response of
the AEGCL and Commission’s Comments
3.1.1 The Commission has received suggestions/objections from four (4) stake holders on
the Petition filed by AEGCL, from the following objectors:
3.1.2 AEGCL submitted its responses to the objections/suggestions received from the above
objectors.
3.1.3 The Commission considered the objections /suggestions received and notified the
objectors to take part in the Hearing process by presenting their views in person before
the Commission, if they so desired.
3.1.4 The Commission held Hearing at the Assam Administrative Staff College, Guwahati
on February 12, 2019.
3.1.5 The objectors attended the Hearing and submitted their views/ suggestions. All the
written representations submitted to the Commission and the oral submission made
before the Commission in the Hearing and the responses of APDCL have been
carefully considered while issuing this Tariff Order.
3.1.6 The objections/ suggestions made by the objectors and responses of the petitioner are
briefly dealt with in this Chapter. The major issues raised by the objectors are
discussed below along with the response of the Petitioner (AEGCL) and views of the
Commission.
3.1.7 While all the objections /suggestions have been given due consideration by the
Commission, only, major responses/ objections received on the Petitions and also
those raised during the course of Hearing have been grouped and addressed issue
wise, in order to avoid repetition.
Sl. No. Name of objector
1 Federation of Industries and Commerce of North Eastern Region (FINER)
2. Assam Branch of Indian Tea Association (ABITA)
3. Bidyut Grahak Mancha (BGM)
23
Issue 1: Operation and Maintenance (O&M) Expenses
Objections:
FINER submitted that, AEGCL has not provided relevant data to substantiate its
estimated additional O&M expense of Rs 11.57 Cr (an increase of 6.30%) in FY 2018-
19, over the approved O&M expenses of Rs 183.79 Cr.
FINER further submitted that AEGCL’s estimated Employee Cost of Rs 170.94 Cr is
7.58% higher than the approved cost of Rs 158.89 amounting to an additional
expenditure of Rs 12.05 Cr. AEGCL has not provided any data to substantiate its claim
of additional cost. Similarly, the estimated A&G expenses for FY 2018-19 are also Rs
3.09 Cr higher than the sum previously allowed by the Commission. FINER therefore,
requested the Commission not to allow the same unless the additional claims are
substantiated with data.
Similar observations have been made by ABITA stating that the projected employee
cost is substantially higher than the actual expense for FY 2017-18. AEGCL has
considered a growth rate of 3% for number of employees for each year of the MYT
period from FY2019-20 to FY2021-22. ABITA submitted that in absence of any details
regarding increase in the number of employees in the past years, a growth rate of 1 %
p.a. may be considered for the MYT period.
ABITA further submitted that while estimating the R&M expenses, ABITA has assumed
k factor to be constant at 1.01% as per past Tariff orders with WPI inflation being 0.33%
and requested that similar methodology may be approved by the Commission for the
calculations of A&G expenses.
Response of AEGCL
AEGCL, in justification of the increase in submitted figures, submitted that the
additional expenditures in employee cost is due to the Revision of Pay (ROP) along
with arrear on account of ROP with effect from 01.04.2016. However, the same was
not included in the approved cost of Rs 158.89 Crs.
AEGCL submitted that the understaffed utility has already initiated the recruitment
process and has large scale recruitment plans for the upcoming years; totaling 400
additional employees in a phased manner within the Control Period.
AEGCL submitted that ‘k’ factor has been determined realistically after including the
expenses of R&M works, which were not undertaken on account of unavailability of
funds.
24
AEGCL further submitted that the information justifying the additional A&G expenses
has been furnished.
Commission’s View
The Commission has allowed the O&M expenses for the MYT Control Period in
accordance with the MYT Regulations, 2018.
Issue 2: Capital Expenditure and Investment
Objections
ABITA submitted that the proposed capital expenditure of Rs 2662.22 Cr, Rs 3183.29
Cr and Rs 3685.45 Cr by AEGCL under various schemes and programs from FY 2019-
20 to FY 2020-21 are overstated, considering their performance in the past years.
Therefore, ABITA proposed an annual capex of Rs. 500 Cr for each year of the control
period as well as for FY 2018-19 with funding of 90% in the form of grant and remaining
from debt and assumed fresh capital investment undertaken in the 1st year, 2nd and
3rd year in the ratio of 30%, 40% and 30% respectively. ABITA requested the
Commission to analyse the details of capital expenditure as it observed that the claims
of AEGCL are generally high at the beginning of the year while the actual expenditure/
capitalization is very low.
FINER requested the Commission to disapprove the additional claim of AEGCL under
a new category of ‘Other Civil Works’ amounting to Rs 5.03 Cr, as the claim is not
supported by any document.
FINER submitted that AEGCL may be directed to produce the updated Fixed Assets
Register along with the Physical Completion Certificate (PCC) and Financial
Completion Certificate (FCC), to show whether the capital expenditure has actually
been put to proper use or not.
FINER observed that allowing Depreciation in true-up, without having an updated Fixed
Assets register, shall put an unnecessary burden on the consumers.
ABITA submitted that the CWIP of AEGCL has been increasing over the past years
and efforts as well as funds should be channelized towards completion of the ongoing
works instead of initiation of new works. ABITA requested the Commission to direct
AEGCL for prioritizing its various ongoing schemes which may yield the desired
benefits as opposed to increasing the CWIP.
25
BGM submitted that the capital investments proposed to be undertaken through funds
from ADB would boost the efficiency of AEGCL, resulting in reduction of transmission
cost.
Response of AEGCL
AEGCL submitted that the capital expenditure and capitalisation is projected on a
practical scenario basis. AEGCL further submitted that the projected capitalisation will
be achieved within the upcoming control period.
AEGCL submitted that Fixed Asset Register of AEGCL as on 31.03.14 has been
updated and a Third party was deployed for physical verification. However,
discrepancy was found between the data provided by the Third Party and the actual
field data. AEGCL informed that a Committee has been formed to review the same
and cross-verification of the same is being carried out.
AEGCL submitted that with new investments and capital expenditure, the CWIP tends
to go up. AEGCL further submitted that the utility has been trying to complete the
ongoing works on priority basis and the same has progressed extensively.
Commission’s View
The Commission has approved the CAPEX and Capitalisation for the MYT Control
Period, as elaborated in Chapter 6 of this Order. AEGCL has been directed to prepare
& maintain updated Fixed Assets Registers duly certified by Chartered Accountants so
that these can be submitted to the Commission as and when asked during tariff
proceedings.
Issue 3: Depreciation
Objection
ABITA submitted that AEGCL has proposed very high capital expenditure as well as
capitalization resulting in large amount of addition in GFA. ABITA observed that this
has been done for claiming higher ARR parameters which are linked to addition of GFA
i.e. depreciation, return on equity and interest on loans. ABITA requested the
Commission to analyse the details of various schemes and approve CAPEX and
Capitalization judiciously.
26
Response of AEGCL
AEGCL noted that ABITA’s computed depreciation for FY 2018-19 is higher than the
depreciation submitted in Tariff Petition. AEGCL submitted that the capital investment
plan covers the upcoming projects extensively with practical and realistic projection of
capitalisation. AEGCL further submitted that the current projections are in line with the
anticipated deadlines of project commissioning.
Commission’s View
The Commission has allowed depreciation in accordance with the MYT Regulations.
Issue 4: Interest and Finance Charges
Objections
ABITA submitted that the higher Interest and Finance Charges proposed for FY 2018-
19 are on the total loan balances, which is not in line with the provisions of the Tariff
Regulations. The projections of interest and finance charges for subsequent Control
Period are also overstated due to high capitalization projected by the Petitioner.
FINER submitted that the proposed Interest and Finance charges is higher than the
amount approved for FY 2018-19, due to addition of normative loans since FY 2017-
18, which has not been approved by the Commission. FINER requested the
Commission to disallow any additional claim on account of Interest and Finance
Charges.
Response of AEGCL
Replying to the submissions of FINER and ABITA, AEGCL submitted that the Interest
and Finance charges for FY 2018-19 have been computed on normative basis. AEGCL
highlighted that the Net normative opening loan computation in AEGCL tariff order
dated 19.03.18 had certain gaps which have been rectified in this tariff petition. Hence,
the resultant net normative opening loan for FY 2018-19 is Rs 232.13 Cr against Rs
71.08 Cr as approved in Tariff order dated 19.03.18.
Commission’s View
The Commission has allowed the interest expenses in accordance with the MYT
Regulations as discussed in the relevant Chapters of this order.
27
Issue 5: Interest on Working Capital
Objection:
ABITA proposed revised interest on Working Capital of Rs 21.94 Cr, Rs 12.83 Cr, Rs
13.60 Cr and Rs 14.67 Cr for FY 2018-19. FY 2019-20, FY 2020-21 and FY 2021-22
respectively based on the revised estimates, against AEGCL’s figures of Rs 28.82 Cr,
Rs 15.40Cr, Rs 17.45 Cr and Rs 20.31 Cr respectively.
Response of AEGCL
AEGCL submitted that ABITA’s comments on the above financial parameters are not
in consonance with actual figures and should be overlooked.
Commission’s View
The Commission has approved the IWC in accordance with the MYT Regulations,
2015 while truing up for FY 2017-18 & APR for FY 2018-19, and in accordance with
the AERC MYT Regulations, 2018 for the MYT Control Period.
Issue 6: BST for Pension Trust Fund
Objections
ABITA submitted that the consumer sales projected by APDCL is increasing at a rate
of only 4% for FY 2018-19 and 6% from 2019-20 to FY 2021-22. However, the
escalation rate used by AEGCL for projecting BST expenses is approximately 10%,
which is substantially high.
Response of AEGCL
AEGCL disagreed with ABITA’s comment pertaining to BST projection. AEGCL
submitted that the BST projected is in-line with APDCL’s consumer sales projection.
Moreover, the revenue from BST is directly proportional to the consumer sales and
shall be subjected to truing-up.
Commission’s views
The Commission has noted the submissions.
28
Issue 7: Transmission Loss
Objections:
ABITA submitted that AEGCL has proposed a constant Transmission loss of 3.44% for
the control period from FY 2019-20 to FY 2021-22, the same as approved by the
Commission for FY 2018-19. The Transmission losses of various STUs are in the
range of 2-3% while that of AEGCL would be amongst the highest in the country.
ABITA proposed a revised transmission loss trajectory for FY 2019-20 to FY 2021-22
with annual reduction of 0.10% in each year of the subsequent Control Period. ABITA
requested the Commission to maintain the loss target for FY 2018-19 and approve
further reduction in loss during the next Control Period. ABITA further requested that
any incentive on account of achievement of transmission availability may be allowed
only subject to achievement of transmission loss target in the future years.
FINER submitted that the estimated Transmission loss for FY 2018-19 is 3.55%, which
is 0.11% higher than that approved by the Commission, despite adequate R&M
expenses approved for the year. This increased estimated loss will result in
supplementary 3 MU loss of energy in the system and should not be allowed.
FINER also submitted that AEGCL be directed to carry out system studies and energy
audit for estimating the actual transmission loss level. FINER submitted that once the
actual losses at 33 KV voltage and above are known, the Commission will also be able
to fix a proper trajectory and consequences of non-fulfilment of the same.
Reply of AEGCL
AEGCL submitted that the transmission loss of 3.54% in FY 2017-18 is at par with loss
levels of other Utilities across India like MEPTCL (Meghalaya) - 4.67% , MSETCL (MH)
-3.30% , RVPN (Rajasthan) - 3.37% , GETCO (Gujarat) - 3.85% , TS Transco
(Telangana) -3.25% to 3.44% .
AEGCL further submitted that with ongoing schemes under “Saubhagya” scheme,
there has been large scale increase in load in rural areas of the State, which has
resulted in the consequent increase of reactive load leading to greater loss and low
voltage profile. AEGCL submitted that capacitive compensation at 33 kV bus of the
Grid Sub Station may not be possible immediately due to involvement of high
expenditure.
29
AEGCL submitted that the pilot project for energy audit of AEGCL system has been
initiated to determine the transmission loss. However, such an exercise of audit shall
be more effective only when the SAMAST scheme is implemented.
AEGCL submitted that the incentive on account of achievement of transmission
availability is based on the MYT Regulations, 2015. AEGCL further submitted that it is
in the process of undertaking different schemes necessary to reduce the transmission
loss in upcoming years.
Commission’s views
The Commission noted the submissions made and have considered these while
approving the transmission loss trajectory. AEGCL is being directed to take steps to
carry out the Energy Audit during FY 2019-20 and submit the report with details of
Transmission Losses along with the next Tariff Petition.
Issue 8: Auditor’s Report
Objection
FINER requested that variations in some expenses and income of AEGCL and other
issues like non-updating of asset registers, noted in the Independent auditors report
for FY 2017-18, may be duly considered by the Commission while allowing true-up
expenses.
Response of AEGCL
AEGCL submitted that Fixed Asset Register as on 31.03.14 has been updated and a
Third party has been deployed for physical verification. However, discrepancy was
found between the data provided by the Third Party and the actual field data. A
Committee has been formed by AEGCL to review the same and cross-verification of
the same is being carried out. AEGCL further submitted that action has already been
taken to rectify the variations noted in Auditor’s Report in the annual accounts of FY
2018-19.
Commission’s views
The Commission has considered all the issues noted in the Auditor’s Report.
30
Issue 9: Income Tax
Objection
ABITA submitted that the claim of actual Income Tax amounting to Rs. 8.80 Cr. paid in
FY 2017-18 on account of profit booked for the year is on account of higher ARR
approved by the Commission for FY 2017-18 based on the submissions of AEGCL.
ABITA requested the Commission to undertake prudence check of the ARR
submissions and not to allow any excess Tariff to AEGCL.
Response of AEGCL
AEGCL submitted that it has not claimed any excess Tariff on account of Income Tax.
AEGCL has claimed Rs. 8.80 Cr only on account of Income Tax which is actually paid
by the company based on Audited Annual accounts.
Commission’s view
The Commission has allowed Income tax in True-up in accordance with the MYT
Regulations, 2015.
Issue 10: Incentives
Objection
ABITA submitted that the proposed incentive of Rs 12 Cr. on Transmission Availability
higher than 98.25% during FY 2017-18 should be disallowed, on account of the high
transmission loss of 3.55% as against the approved loss of 3.48%. ABITA submitted
that higher transmission loss results in higher power purchase requirement which
ultimately is recovered from the consumers. ABITA, therefore, requested the
Commission to disallow any incentive towards transmission availability in case AEGCL
is unable to meet the transmission loss target.
Response of AEGCL
AEGCL submitted that it has claimed Incentive on Transmission Availability as per
AERC MYT Regulations.
Commission’s view
The Commission has allowed incentive in True-up in accordance with the MYT
Regulations, 2015. The detailed ruling of the Commission is elaborated in Chapter 4.
31
Issue 11: Transmission Cost
Objection
BGM submitted that one of the primary reasons for high transmission tariff in the State
is the high cost of transmission charges payable to PGCIL. BGM requested AERC to
issue necessary advisories to the State Government to consider the points raised by
them in their earlier petition 17/2017.
Reply of AEGCL (During Public Hearing)
The matter regarding high PGCIL (POC) charges have been discussed extensively in
different forums of the Commission in presence of representatives from the Power
Department, Government of Assam. The Central Government has also displayed
concern regarding high POC charges for few states and a Committee has been
constituted to study the matter afresh. AEGCL and APDCL have also participated in
the deliberations of the Committee and expressed their views.
Commission’s view
The Commission has already sent an advisory to the State Government in pursuance
of the Order of the Commission in petition NO. 17/2017 of BGM. The response of the
State Government is awaited.
32
4 Review of True-Up for FY 2016-17
4.1 Interest and Finance Charges for FY 2016-17
4.1.1 AEGCL submitted that the Commission had trued-up the Interest and Finance charges
for FY 2016-17 in the Tariff Order dated March 19, 2018. AEGCL submitted that while
doing so, the Commission had calculated the Normative Loan Outstanding as on April
1, 2016 by reducing the cumulative repayment as admitted by the Commission up to
March 31, 2016 from the Gross Normative Loan. Consequently, the Commission had
arrived at a negative net normative loan, leading to ‘nil’ Interest and Finance charges
for FY2016-17.
4.1.2 However, AEGCL while carrying out the computations observed that the cumulative
repayment, i.e., (net depreciation, excluding the depreciation for assets funded through
grants, approved by the Commission in True-up Orders) is not Rs.603.30 Crore.
AEGCL submitted that cumulative repayment for FY 2016-17 is Rs.225.03 crore,
hence, the resulting Net Normative loan for FY 2016-17 is Rs. 255.57crore, as shown
in the Table below:
Table 5: Net Normative Loan for FY 2016-17 as submitted by AEGCL (Rs. Crore)
Particulars Order AEGCL
Submission
Gross Fixed Assets (a) 1544.59 1544.57
Gross Fixed Assets excluding Land (b) 1515.46 1515.45
Opening CWIP (c) 921.72 921.72
Grant (CWIP + Assets) (d) 1550.39 1550.39
Grant towards GFA (e=d*b/(b+c)) 964.05 964.04
Equity (f) 99.93 99.93
Gross Normative Loan (g=a-e-f) 480.61 480.60
Less: Cumulative repayment (net depreciation, excluding
the depreciation for assets funded through grants,
approved by the Commission in True-up Orders) (h)
603.30 225.03
Net Normative loan (i=g-h) (122.69) 255.57
Net Normative loan considered for FY 2016-17 0.00 255.57
4.1.3 AEGCL submitted that since, the actual Net Normative loan should be Rs. 255.57
crores as against ‘Nil’ approved in True-up of FY 2016-17, the Interest and Finance
33
charges for FY 2016-17 should have been allowed as Rs. 25.95 Crores as against ‘Nil’
approved by the Commission in the Tariff Order dated March 19, 2018, as shown in
the Table below:
Table 6: Interest and Finance Charges for FY 2016-17 as submitted by AEGCL (Rs. Crore)
Particulars Order AEGCL
Submission
Net Normative Opening Loan - 255.57
Addition of Normative Loan during the Year 17.91 17.91
Normative Repayment during the Year 19.64 19.64
Net Normative Closing Loan - 253.84
Interest Rate 10.19% 10.19%
Interest Expenses on Loan - 25.95
4.1.4 AEGCL requested the Commission to admit and allow the Interest and Finance
Charges of Rs.25.95 Crore in the consolidated ARR of FY 2019-20.
Commission’s Analysis
4.1.5 The Commission sought clarification from AEGCL regarding the provisions of the
Regulations under which AEGCL was seeking to review the Interest and Finance
Charges allowed in the true-up for FY 2016-17, at this stage. In reply, AEGCL
submitted that it was seeking relief under the inherent powers of the Commission as it
was seeking to rectify an error in the earlier Order.
4.1.6 The Commission is of the view that, in case AEGCL felt that there was an error
apparent in the Order, AEGCL should have approached the Commission for necessary
relief through a Review Petition, within the prescribed timelines. The present Prayer of
AEGCL appears to be an afterthought.
4.1.7 In spite of the above delay on the side of AEGCL, the Commission has analysed the
submissions of AEGCL in this regard. The Commission is of the view that AEGCL is
mixing up the issue. In the AERC Tariff Regulations, 2006, neither was there any
linkage between depreciation and repayment of loans, nor was the interest expenses
being allowed on a normative basis. The actual interest expenses were being allowed
to be recovered after prudence check, and based on the actual repayment of loans as
submitted by AEGCL and as reflected in the Audited Accounts.
4.1.8 As per the AERC MYT Regulations, 2015, Depreciation was considered as normative
repayment of loans, and interest expenses were allowed on a normative basis only
34
from the Years starting from FY 2016-17.
4.1.9 Hence, in the true-up for FY 2016-17, the Commission considered the cumulative
repayment already allowed by the Commission in the Orders for previous Years and
did not consider the same as equivalent to the depreciation allowed in previous Years.
As a result, the net normative opening loan for FY 2016-17 was negative, and was
considered as ‘Nil’. Thus, there is no error in the Interest and Finance Charges allowed
in the true-up for FY 2016-17.
4.1.10 Accordingly, AEGCL’s prayer in this regard is dismissed.
35
5 Truing up for FY 2017-18
5.1 Methodology for Truing Up
5.1.1 The Commission had approved the ARR for the Control Period from FY 2016-17 to FY
2018-19 and Tariff for FY 2017-18 in the MYT Order dated March 31, 2017.
5.1.2 AEGCL submitted the Truing-up Petition for FY 2017-18 based on audited annual
accounts and provisions of MYT Regulations, 2015, wherever applicable. AEGCL has
sought true-up for FY 2017-18, with the Revenue Gap/(Surplus) to be
recovered/adjusted during FY 2019-20.
5.1.3 The Commission approves the cost parameters through approval of the ARR at the
beginning of the year, keeping in view the data available at that point of time. The cost
approvals for each of the items are based on projection of expenses and revenue
before beginning of the year and the provisions of MYT Regulations, 2015. The
projections might vary over the course of the year.
5.1.4 The actual cost/values for certain elements/parameters may vary as against the
approved cost during the year due to various controllable and uncontrollable factors.
The Licensee may end up with higher or lower expenditure, as the case may be, at the
end of the year as against the approved cost.
5.1.5 The Commission analyses the actual expenditure for the previous year/years based
on the audited Annual Accounts of the Licensee and allows/disallows the recovery of
the actual expenditure through the ensuing year’s tariff, subject to prudence check.
5.1.6 In the present Chapter, the Commission has carried out the Truing up for FY 2017-18
based on the submissions of AEGCL, audited annual accounts for FY 2017-18 and
provisions of MYT Regulations, 2015.
5.1.7 In this Chapter, the Commission has analyzed all the elements of actual expenditure
and revenue of AEGCL for FY 2017-18, and undertaken the truing-up of expenses and
revenue in accordance with the MYT Regulations, 2015. The Commission has
approved the sharing of gains and losses on account of controllable factors between
AEGCL and its beneficiaries, in accordance with Regulation 13 of the MYT
Regulations, 2015.
36
5.2 Transmission Loss
5.2.1 AEGCL submitted the Transmission Loss of 3.55% for FY 2017-18 for the purpose the
Truing up, as shown in the following Table:
Table 7: Transmission Loss for FY 2017-18 as submitted by AEGCL
S.N. Particulars
Approved in
T.O. dtd
31.03.17
AEGCL
Submission
1 Energy Injected (MU) 11395.00 8921.27
2
Energy Sent Out to APDCL & OA
Consumers (MU) 10998.00 8318.43
3 Energy Sent Out to OA Consumers (MU) 286.44
4 Total Energy Sent Out 10998.00 8604.87
4 Transmission Loss (MU) 397.00 316.40
5 Transmission Loss (%) 3.49% 3.55%
Commission’s Analysis
5.2.2 The Commission has verified the Transmission loss through documentary evidences
submitted by AEGCL. It is noted that the actual Transmission loss for FY 2017-18 is
higher than the Transmission Losses approved by the Commission in the MYT Order
dated March 31, 2017.
5.2.3 For the true-up, the Commission has considered the actual Transmission Loss of
3.55% for FY 2017-18, for the purpose of Energy Balance for APDCL. AEGCL is
directed to maintain the transmission loss within the approved levels, in light of the
significant capital expenditure proposed by AEGCL towards system strengthening.
5.3 Revenue from Operations
5.3.1 AEGCL has claimed Revenue of Rs. 1194.99 Crore for FY 2017-18 for Truing up
purpose.
Commission’s Analysis
5.3.2 The Commission had approved net ARR of Rs. 1197.32 Crore for AEGCL and Rs.
2.60 crore for SLDC, for FY 2017-18 in the MYT Order dated March 31, 2017. During
FY 2017-18, AEGCL billed APDCL based on the MYT Order dated March 31,
37
2017.The audited accounts for FY 2017-18 reflects the actual revenue of Rs.
1194.99Crore.
5.3.3 In view of the above, the Commission approves the actual revenue of Rs.
1194.99Crore as per the audited accounts, for the Truing up for FY 2017-18.
5.4 Non-Tariff Income
5.4.1 The Commission had approved the Non-Tariff Income of Rs. 85.99 Crore for FY 2017-
18 in the MYT Order dated March 31, 2017. Against this, AEGCL has claimed Non-
Tariff Income of Rs. 195.76Crore for FY 2017-18, after excluding the incentive
component.
Commission’s Analysis
5.4.2 AEGCL is entitled to retain the incentive on Transmission Availability computed as per
Regulation 67 of MYT Regulations, 2015. The computation of incentive has been done
separately in subsequent Section of this Order, and has been added to the ARR, to
ensure that the same is retained by AEGCL. The incentive has not been considered
as part of Non-Tariff Income, so that AEGCL is able to retain the incentive.
5.4.3 In view of the above, the Commission approves the Non-Tariff Income at Rs.
193.63 Crore for FY 2017-18 as per the Audited Annual Accounts, for the purpose
of truing up.
5.5 PGCIL Charges
5.5.1 AEGCL has claimed actual PGCIL Charges of Rs. 509.29 Crore for FY 2017-18,
against PGCIL Charges of Rs. 534.55 Crore approved in the MYT Order dated March
31, 2017.
Commission’s Analysis
5.5.2 The Commission has scrutinised PGCIL Charges claimed by AEGCL vis-à-vis monthly
bills submitted by AEGCL. The Commission notes that PGCIL Charges claimed are
gross billed amount. However, rebate received and credit given to Open Access
Consumers has been shown separately under Non-Tariff Income. The PGCIL Charges
are to be paid in accordance with the Orders issued by the CERC. The actual
38
expenditure incurred by AEGCL towards PGCIL charges as per the Audited Accounts
is Rs. 509.29 Crore for FY 2017-18.
5.5.3 Therefore, the Commission approves PGCIL Charges of Rs. 509.29 Crore for FY
2017-18 after truing up.
5.6 O&M Expenses
5.6.1 AEGCL submitted the O&M expenses for FY 2017-18comprising following heads:
a) Employee expenses
b) R&M expenses
c) A&G expenses
The claim of AEGCL under various heads of O&M expenses are discussed below:
5.6.2 Employee Expenses
AEGCL submitted that Employee Expenses comprise salaries, dearness allowance,
bonus, terminal benefits in the form of pension and gratuity funding, leave encashment,
and staff welfare expenses. AEGCL has claimed Rs. 142.33 Crore towards employee
expenses for FY 2017-18.
5.6.3 Repairs and Maintenance (R&M) Expenses
Repairs and Maintenance Expenses are incurred for the day to day upkeep of the
transmission network of the company and form an integral part of the company’s efforts
towards reliable and quality power transmission as also in reduction of losses in the
system.
AEGCL has submitted that assets of AEGCL are old and require regular maintenance
to ensure uninterrupted operations. AEGCL has also stated that it has been trying its
best to ensure uninterrupted operations of the system and has accordingly been
undertaking necessary expenditure for R&M activities regularly. AEGCL has claimed
R&M expenses of Rs. 18.94 Crore for FY 2017-18.
5.6.4 Administrative and General (A&G) expenses
A&G expenses comprise rents, telephone and other communication expenses,
professional charges, conveyance and traveling allowances, other debits. AEGCL has
claimed A&G expenses of Rs. 8.92 Crore for FY 2017-18.
39
Commission’s Analysis
5.6.5 The O&M Expenses for the Control Period for FY 2016-17 to FY 2018-19, was allowed
in accordance with Regulation 68.9 of the MYT Regulations, 2015.
5.6.6 In accordance with the above Regulations, the Commission in the MYT Order dated
March 31, 2017 has allowed O&M Expenses on normative basis. However, AEGCL
has claimed O&M Expenses on actual basis. AEGCL was asked to submit the
computation of O&M expenses in accordance with Regulation 68 of MYT Regulations,
2015. Subsequently, AEGCL has submitted the normative O&M expenses as per the
formula specified in the MYT Regulations, 2015.
Table 8: Normative O&M Expenses for FY 2017-18 as submitted by AEGCL
Sl.No. Particulars Approved in
MYT Order
AEGCL
Submission
O&M Expenses 175.96 170.20
A Employee Cost 152.25 142.33
B R&M Expenses 16.26 18.94
C A&G Expenses 7.45 8.92
5.6.7 While computing the normative R&M expenses for FY 2017-18, AEGCL has
considered the ‘k’ factor as 1.20% based on the ‘k’ factor computed by AEGCL for the
Control Period from FY 2019-20 to FY 2021-22, after factoring in the estimated cost to
accomplish the unfinished R&M tasks for FY 2017-18.
5.6.8 For the purpose of truing up for FY 2017-18, the Commission has computed the O&M
Expenses on normative basis as per Regulation 68 of the MYT Regulations, 2015. The
variation between normative O&M expenses and actual O&M Expenses has been
considered under sharing of gains and loss on account of controllable items as per
Regulation 13 of MYT Regulations, 2015.
5.6.9 For computation of normative employee expenses for FY 2017-18, the Commission
has adopted the following approach:
a) The employee expenses approved after True-up for FY 2016-17 have been
considered as base expenses.
b) CPI inflation has been computed as average increase of CPI for the period from
FY 2014-15 to FY 2016-17, which works out to 5.35%
c) The growth factor of 1% has been considered as per the MYT Order.
40
d) Employee expenses for SLDC have been considered same as submitted by
AEGCL. Employee expenses for Transmission have been derived after deducting
the employee expenses for SLDC from normative employee expenses.
5.6.10 The normative employee expenses approved in the true-up for FY 2017-18 are shown
in the following Table:
Table 9: Approved Employee Expenses for FY 2017-18 (Rs. Crore)
Particulars FY 2017-18
Actual Employee Expenses for the previous year EMPn-1 140.73
Growth factor Gn 1.00%
CPI Inflation CPI 5.35%
Employee expenses (excluding RoP) 149.74
Revision of Pay 15.49
Normative Employee Expenses (excluding RoP) 149.74
Employee expenses -Transmission 147.64
Employee expenses -SLDC 2.10
5.6.11 For computation of R&M Expenses for FY 2017-18, the Commission has considered
the following approach:
a) WPI inflation has been computed as average increase of WPI index for period from
FY 2014-15 to FY 2016-17, after excluding the negative WPI of FY 2015-16, which
works out to 1.50%.
b) K-factor governs the relationship between R&M expenses and Gross Fixed Assets.
The Commission has analysed the relationship between approved R&M expenses
and Gross Fixed Assets for the period from FY 2011-12 to FY 2015-16 in MYT
Order. Accordingly, the K-factor for the Control Period has been approved as
1.01%. The same K-factor has been considered for computation of normative R&M
Expenses for FY 2017-18. Since, K-factor has been computed on the basis of
average GFA, for working out R&M expenses for FY 2017-18, average GFA for
previous years has been considered. The Commission does not find merit in
AEGCL’s proposal of considering the ‘k’ factor computed on the basis of proposed
works not taken up in the true-up for FY 2017-18.
c) R&M expenses for SLDC have been considered same as submitted by AEGCL.
R&M expenses for Transmission has been derived after deducting R&M expenses
for SLDC from normative R&M expenses.
5.6.12 The normative R&M expenses approved for FY 2017-18 are shown in the following
41
Table:
Table 10: Approved R&M Expenses for FY 2017-18 (Rs. Crore)
Particulars FY 2017-18
Opening GFA for previous year 1,544.59
Closing GFA for previous year 1,628.68
Average GFA for previous year GFAn-1 1,586.64
K Factor K 1.01%
WPI Inflation WPI 1.50%
R&M Expenses 16.24
AMC Cost for SCADA/EMS
Net Normative R&M Expenses 16.24
R&M Expenses - Transmission 16.19
R&M Expenses - SLDC 0.05
5.6.13 For computation of A&G expenses for FY 2017-18, the Commission has adopted the
following approach:
a) The A&G expenses approved after True-up for FY 2016-17 have been considered
as base expenses.
b) WPI inflation has been computed as average increase of WPI index for period from
FY 2014-15 to FY 2016-17, after excluding the negative WPI of FY 2015-16, which
works out to 1.50%.
c) A&G expenses for SLDC have been considered same as submitted by AEGCL.
A&G expenses for Transmission have been derived after deducting the A&G
expenses for SLDC from normative A&G expenses.
5.6.14 The normative A&G expenses for FY 2017-18 are shown in the following Table:
Table 11: Approved A&G Expenses for FY 2017-18 (Rs. Crore)
Particulars FY 2017-18
A&G Expenses for Previous Year A&Gn-1 9.35
WPI Inflation WPI 1.50%
Provision Provision 0.00%
A&G Expenses 9.49
Normative A&G Expenses for the year 9.49
A&G Expenses-Transmission 9.08
A&G Expenses-SLDC 0.41
5.6.15 The normative O&M expenses approved by the Commission for FY 2017-18are shown
in the following Table:
42
Table 12: Normative O&M Expenses approved by Commission for FY 2017-18 (Rs.
Crore)
Sl.
No. Particulars
MYT
Order AEGCL
Approved
after
Truing up
1 Employee Expenses 154.58 142.33 147.64
2 Repairs and Maintenance
Expenses 16.26 18.94 16.19
3 Administrative & General
Expenses 7.45 8.92 9.08
Total 178.29 170.20 172.91
5.6.16 Further, Regulation 11.2 of MYT Regulations, 2015 specifies O&M Expenses
(excluding terminal liabilities with regard to employees on account of changes in pay
scales or dearness allowance due to inflation) as controllable factors. Hence, for
undertaking sharing of gains or losses, the Commission has excluded the terminal
liabilities from normative as well as actual Employee expenses. Accordingly, terminal
liabilities are allowed on actual basis.
5.6.17 The sharing of (gains)/losses on account of O&M Expenses is shown in the following
Table:
Table 13: Sharing of (gains)/losses for O&M Expenses for FY 2017-18 (Rs. Crore)
Sl. No.
Particulars Actual
* Normativ
e (Gains)/ losses
(Gains)/Losses to be shared with APDCL
a b c=(b-a) d=c x 1/3
1 Employee Cost 147.31 -
2 Less: Terminal Benefits 24.29 -
3 Less: ROP Arrears 15.49
4 Employee Cost excl. Terminal
benefits & ROP Arrears 107.53 120.66 (13.14) (4.38)
5 Repair & Maintenance 15.10 16.19 (1.09) (0.36)
Administrative & General
Expenses 6.57 9.08 (2.51) (0.84)
SLDC Charges 2.56 2.56 - -
6 Total 131.75 148.49 (16.74) (5.58)
Note – * - As per audited accounts
No sharing of gains or losses has been considered for Terminal liabilities.
5.6.18 Since, normative O&M expenses are higher than actual expenses, the gain of Rs. 5.58
43
Crore has been shared and passed on through ARR.
5.7 SLDC Charges
5.7.1 AEGCL submitted the SLDC Charges of Rs. 2.56 Crore for FY 2017-18 against the
approved charges of Rs. 2.60 Crore in the MYT Order. The SLDC Charges mainly
comprise Employee expenses, R&M expenses and A&G Expenses.
Commission’s Analysis
5.7.2 The Commission approves the SLDC Charges of Rs. 2.56 Crore for FY 2017-18 as
submitted by AEGCL, after truing up.
5.8 Capital Expenditure and Capitalisation
5.8.1 AEGCL submitted actual Capital Expenditure and Capitalisation for FY 2017-18 as
shown in the following Table:
Table 14: Actual Capital Expenditure and Capitalisation as submitted by AEGCL (Rs.
Crore)
Sl.
No. Particulars
Approved in MYT
Order Actual
1 Capital Expenditure 292.56 165.07
2 Capitalisation 303.79 55.93
5.8.2 As regards the funding, AEGCL submitted that funding of Capital Expenditure is done
through various sources namely Loans, Grants, Equity and Debt. No infusion of equity
has been made other than equity capital allocated to the Companies in the Opening
Balance Sheets (OBS) of the Companies. Accordingly, all new addition of assets is
created by funding from grants and loan. The funding of capitalisation as submitted by
AEGCL is shown in the following Table:
Table 15: Funding of Capitalisation for FY 2017-18 as submitted by AEGCL (Rs. Crore)
Sl. No. Particulars Approved in MYT
Order
AEGCL
Submission
1 Grant 201.44 55.93
2 Equity 6.74 -
3 Debt 95.61 -
4 Total Capitalisation 303.79 55.93
44
Commission’s Analysis
5.8.3 The Commission has approved the scheme-wise capital expenditure and capitalisation
in the Business Plan Order dated September 1, 2016. However, in the MYT Order, the
Commission has approved the capital expenditure and capitalisation based on the past
trends for the purpose of tariff computation. The Commission notes that the actual
capital expenditure and capitalisation incurred in FY 2017-18are much lower than the
values approved in MYT Order dated March 31, 2017. The Commission sought the
details of project-wise actual capital expenditure and capitalisation for FY 2017-18,
which has not been submitted by AEGCL.
5.8.4 For the purpose of truing up, the Commission has considered the actual capital
expenditure and capitalisation for FY 2017-18 based on the audited accounts. As
regards the funding of capitalisation, the Commission has considered the actual
funding as submitted by AEGCL.
5.8.5 In view of the above, the Capital Expenditure, capitalisation and its funding as
approved by the Commission in the true-up for FY 2017-18 is shown in the following
Table:
Table 16: Capital Expenditure and Capitalisation for FY 2017-18 approved by
Commission (Rs. Crore)
Sr. No. Particulars MYT Order AEGCL
Approved
after Truing
up
1 Capital Expenditure 185.16 165.07 165.07
2 Capitalisation 303.79 55.93 55.93
Funding of Capitalisation
3 Equity 6.74 0.00 0.00
4 Grant 201.44 55.93 55.93
5 Loan 95.61 0.00 0.00
6 Total 303.79 55.93 55.93
5.9 Depreciation
5.9.1 The Commission had approved the Depreciation of Rs. 17.07 Crore for FY 2017-18 in
the MYT Order dated March 31, 2017. As against this, AEGCL has claimed
depreciation of Rs. 21.71 Crore for FY 2017-18 for the purpose of True-up.
45
Commission’s Analysis
5.9.2 The Commission has considered the opening GFA for FY 2017-18 as per the closing
GFA value approved in True up of FY 2016-17 vide the Tariff Order dated March 19,
2018. The Commission has computed depreciation as per scheduled rates specified
in the Tariff Regulations, 2015.
5.9.3 As per Regulation 33 of the MYT Regulations, 2015, the total depreciation during the
life of the asset shall not exceed 90% of the original cost of Asset. The Commission
has computed the depreciation separately for assets added under each asset head in
each year. The Commission has disallowed the depreciation in excess of 90% of the
original cost of asset under different asset heads.
5.9.4 In line with the approach adopted in the previous Orders and as specified in Regulation
33 of the MYT Regulations, 2015, the Commission has not considered the depreciation
on assets funded through grants, consumer contribution or capital subsidy, for FY
2017-18.
5.9.5 The depreciation approved in the truing up for FY 2017-18 is given in the Table below:
Table 17: Depreciation approved for FY 2017-18 (Rs. Crore)
Sr.
No. Particulars
Opening
GFA
Addition
during
the year
Rate of
deprecia
tion
Depreciation
as per MYT
Regulations,
2015
1 Land owned under full
ownership
28.87
8.80 -
-
Land under lease 0.30 - 3.34% 0.00
2 Building 30.52 3.68 3.34% 0.52
3 Hydraulic 2.64 - 5.28% 0.03
4 Other Civil Works 69.47 1.48 3.34% 2.34
5 Plant & Machinery 758.66 30.48 5.28% 36.88
6 Lines & Cable Net work 727.23 7.64 5.28% 17.49
7 Vehicles 4.68 0.22 9.50% 0.09
8 Furniture & Fixtures 3.82 0.26 6.33% 0.14
9 Office Equipment 2.49 0.58 6.33% 0.13
10 Grand Total 1,628.68 55.93 57.63
14 Less: Depreciation for Grants/
Consumer Contribution 37.79
15 Net Total 19.84
46
5.9.6 The Commission accordingly approves Depreciation of Rs. 19.84 Crore for FY
2017-18 after truing up.
5.10 Interest and Finance Charges
5.10.1 The Commission had approved Interest and Finance Charges of Rs. 9.41 crore for FY
2017-18 in the MYT Order dated March 31, 2107. As against this, AEGCL has claimed
Interest and finance charges of Rs. 25.02 Crore for FY 2017-18 based on Audited
Accounts.
Commission’s Analysis
5.10.2 The Commission has approved Interest on loan capital for FY 2017-18 on normative
basis as per Regulation 35 of MYT Regulations, 2015. As per the above said
Regulation, the Normative Loan Outstanding as on April 1,2017 is derived after
reducing the cumulative repayment as admitted by the Commission up to March 31,
2017 from the Goss Normative Loan. Accordingly, the Commission has computed the
net normative loan outstanding as on April 1, 2017.
5.10.3 The Commission has considered the opening net normative loan as on April 1, 2017
as NIL. The addition of loan has been considered equal to debt portion of capitalised
works as approved by the Commission in this Order. The loan repayment has been
considered equivalent to depreciation approved in this Order.
5.10.4 As per MYT Regulations, 2015, weighted average rate of interest shall be computed
based on outstanding loan as on April 1, 2017. The Commission sought details of
outstanding loan as on April 1, 2017 along with documentary evidences. The
Commission notes that ADB loan of Rs. 89.39 Crore at interest rate of 10.50% and
State Government loan of Rs. 354.37 Crore at weighted average interest rate of
10.12% are outstanding as on April 1, 2017. Accordingly, weighted average interest
rate has been computed as 10.19% for computation of interest on loan capital.
5.10.5 The Interest on loan capital as approved by the Commission for FY 2017-18 is shown
in the following Table:
47
Table 18: Approved Interest on loan Capital for FY 2017-18 (Rs. Crore)
Particulars Approved after
Truing up
Net Normative Opening Loan -
Addition of normative loan during the year -
Normative Repayment during the year 19.84
Net Normative Closing Loan -
Interest Rate 10.19%
Interest Expenses on Loan -
Finance Charges
Total Interest and Finance Charges -
5.10.6 The Commission considers Interest on loan Capital as NIL in the truing up for
FY 2017-18.
5.11 Return on Equity
5.11.1 AEGCL has claimed the Return on Equity of Rs. 15.49 Crore for FY 2017-18 as
compared to the RoE of Rs. 16.01 crore approved by the Commission in the MYT
Order. AEGCL has considered no equity addition during FY 2017-18.
Commission’s Analysis
5.11.2 The Commission has approved the Return on Equity in accordance with Regulation 34
of the MYT Regulations, 2015. The Commission has considered the addition of equity
equivalent to equity portion of capitalised works as approved in this Order, which is Nil.
Therefore, the approved Return on Equity at 15.50% is shown in the Table below:
Table 19: Return on Equity approved by the Commission for FY 2017-18 (Rs. Crore)
Sr.
No
.
Particulars Approved after
Truing up
1 Opening Equity Capital 99.93 2 Equity addition during the year - 3 Closing Equity 99.93 5 Rate of Return on equity 15.50% 6 Return on Equity 15.49
5.11.3 The Commission approves the Return on Equity of Rs. 15.49 Crore for FY 2017-
18 after Truing up.
48
5.12 Interest on Working Capital (IoWC)
5.12.1 AEGCL submitted that Interest on Working Capital (IoWC) has been calculated on
normative basis as per the provisions of MYT Regulations, 2015. The rate of interest
is State Bank of India Base Rate as on April 1, 2016 plus 350 basis points. AEGCL
has claimed IoWC of Rs. 27.52 Crore for FY 2017-18 for Truing up.
Commission’s Analysis
5.12.2 The Commission has computed IoWC in accordance with Regulation 37.2 of the MYT
Regulations, 2015. The rate of Interest has been considered equal to State Bank of
India Base Rate as on 1stApril of FY 2017-18 plus 350 basis points, i.e., 12.60%
5.12.3 For computation of working capital requirement, the normative O&M Expenses and
actual revenue billed as receivables have been considered. IoWC approved by the
Commission in the truing up for FY 2017-18 is shown in the following Table:
Table 20: Interest on Working Capital for FY 2017-18 as approved by the Commission
(Rs. Crore)
Sr.
No. Particulars
MYT
Order
Claimed
by AEGCL
Approved
after True-up
1 O&M expenses for one month 14.66 14.18 14.41
2 Maintenance spares @ 15% of
O&M Expenses 26.40 25.53 25.94
3 Receivables for two months 145.87 178.68 199.17
4 Total Working Capital requirement 186.93 218.39 239.51
5 Rate of Interest 12.80% 12.60% 12.60%
6 Interest on Working Capital 23.93 27.52 30.18
5.12.4 Accordingly, the Commission approves Interest on Working Capital of Rs. 30.18
Crore for FY 2017-18 for the truing up.
5.13 Other Debits
5.13.1 AEGCL has claimed Other Debits of Rs.0.90 Crore for FY 2017-18 based on the
Audited Accounts as against NIL approved in the MYT Order dated March 31, 2017.
Commission’s Analysis
5.13.2 The Commission has analysed the details and justification submitted by AEGCL for
Other Debits for FY 2017-18. The Commission notes that Other Debits includes the
expenses towards loss on obsolescence of stores, compensation for injuries, deaths
49
and damages to outsiders. The Commission is of view that these expenses are well
within the control of AEGCL. Hence, the Commission has allowed only
decommissioning cost under Other Debits for FY 2017-18.
5.13.3 Accordingly, the Commission considers Other Debits asRs.0.01 Crore for FY 2017-18.
5.14 BST for Pension Fund (Special Charges for Terminal Benefits)
5.14.1 In the MYT Order dated March31, 2017, the Commission had approved special
charges on Bulk Supply Tariff at 20 paise per unit amounting to Rs. 181.52 Crore for
FY 2017-18. AEGCL has claimed Rs. 172.10 Crore as BST for Pension Fund as per
the audited annual accounts for FY 2017-18.
Commission’s Analysis
5.14.2 The Commission approves the BST for Pension Fund (Special Charges for Terminal
Benefits) of Rs. 172.10 Crore for FY 2017-18 as claimed by AEGCL based on audited
accounts.
5.15 Net Prior Period Expenses/(income)
5.15.1 AEGCL has claimed net prior period expenses of Rs. 5.68 Crore for FY 2017-18, based
on the Audited Accounts.
Commission’s Analysis
5.15.2 The Commission has analysed the component-wise details and justification for Net
Prior period expenses/(income) for FY 2017-18 as submitted by AEGCL. The
Commission has considered the treatment of prior period items based on the treatment
allowed to that particular item in the true-up for the year to which the
expenses/(income) pertain.
5.15.3 The Commission has disallowed the prior period expenses/(income) towards
depreciation since, this expense had not been allowed by the Commission in the past
Orders based on audited accounts, and had allowed depreciation based on its own
computations. Further, for controllable expenses such as R&M, A&G, etc, 1/3rd of
AEGCL claim under prior period is considered as in earlier years, sharing of the
gains/losses has been allowed, and for uncontrollable items such as Income
Tax/refund of Income Tax, full prior period expense/income is considered.
50
5.15.4 The Net prior period expenses/(income) submitted by AEGCL and approved by the
Commission for FY 2017-18, are shown in the following Table:
Table 21: Net Prior Period expenses/(income) approved for FY 2017-18 (Rs. Crore)
Sr.
No.
Particulars AEGCL’s
Submission
(as per
Accounts)
Approved
after Truing
up
Prior Period Expenses
1 Depreciation under provided in prior period 1.37 0.00
2 Other Expenses relating to prior period 8.14 3.09
Adjustment of excess Transmission Incentive
bill relating to FY17 5.05 0.00
Refund of penalties recovered from
contractors during earlier years 0.15 0.15
Adjustment of Income Tax bill for PGCIL
related to FY17 1.90 1.90
Adjustment of double credit of refund
received from truing up of NERLDC during
FY17
1.01 1.01
Electricity charges paid to APDCL by
Salakati GSS wrongly debited against
"payable to APDCL" instead of "Expense
Head" in FY16
0.02 0.02
Refund of penalties recovered from
contractors during FY17 0.01 0.01
3 Interest & Other finance charges related to
prior periods 0.08 0.00
4 Materials related expenses related to prior
periods 0.11 0.00
Sub-total 9.70 3.09
Prior Period Income
5 Excess provision for depreciation in prior
period
0.01
0.00
6 Other Income relating to prior period 15.38 13.98
7 Sub-total 15.39 13.98
Net Prior Period Expenses/(Income) (5.69) (10.89)
5.15.5 Accordingly, the Commission approves the Net Prior Period Income of Rs. 10.89
Crore for FY 2017-18 after Truing-up.
5.16 Income Tax
5.16.1 AEGCL has claimed an amount of Rs. 8.80 Crore towards Income Tax as per the
51
audited accounts for FY 2017-18.
Commission’s Analysis
5.16.2 The Commission has verified the actual Income Tax paid on the basis of Tax paid
challans submitted by AEGCL and has hence, considered the Income Tax of Rs. 8.80
Crore for FY 2017-18.
5.17 Incentive for Transmission Availability
5.17.1 AEGCL has billed the amount of Rs12.10 Crore towards incentive for Transmission
Availability higher than normative Availability as per MYT Regulations, 2015. AEGCL
clarified that subsequently, based on Audit observations, a credit bill of Rs. 6.39 Crore
has been issued to APDCL on this account.
Commission’s Analysis
5.17.2 Regulation 67 of the MYT Regulations, 2015 specifies Normative Transmission
Availability of 98% for full recovery of transmission charges and 98.5% for incentive
consideration.
5.17.3 The actual Transmission Availability for AEGCL for FY 2017-18 is 99.75% on annual
basis. The Commission sought the details of monthly Transmission Availability duly
certified by SLDC, which was submitted by AEGCL. Also, the computation and
payment of Transmission Charges has been linked to monthly Transmission
Availability computed as per Regulation 71 of the MYT Regulations, 2015. Accordingly,
the Commission has computed the Incentive on Transmission Availability as shown in
the following Table:
Table 22: Incentive on Transmission Availability for FY 2017-18 as approved by the
Commission (Rs. Crore)
Sr. No. Month
No. of Days
in Month
Monthly Transmission
Charges
Actual Availability
(%)
Transmission Charges inclusive of
incentive Incentive
1 Apr-17 30 61.00 97.77% 60.86 (0.14)
2 May-17 31 63.03 99.54% 63.70 0.67
3 Jun-17 30 61.00 99.71% 61.75 0.75
4 Jul-17 31 63.03 99.15% 63.45 0.42
5 Aug-17 31 63.03 99.15% 63.45 0.42
6 Sep-17 30 61.00 98.65% 61.09 0.09
52
Sr. No. Month
No. of Days
in Month
Monthly Transmission
Charges
Actual Availability
(%)
Transmission Charges inclusive of
incentive Incentive
7 Oct-17 31 63.03 99.00% 63.35 0.32
8 Nov-17 30 61.00 99.79% 61.77 0.77
9 Dec-17 31 63.03 99.86% 63.83 0.80
10 Jan-18 31 63.03 98.36% 63.03 -
11 Feb-18 28 56.93 97.40% 56.58 (0.35)
12 Mar-18 31 63.03 97.70% 62.84 (0.19) Total 365 742.15 98.85% 745.70 3.55
5.17.4 As regards the credit bill of Rs. 6.39 Crore issued by AEGCL to APDCL on this account,
the Commission has not considered the incentive of Rs. 12.10 crore billed by AEGCL
as income and hence, not considered the credit bill as a reduction in income.
5.17.5 The Commission approves the Incentive of Rs. 3.55 Crore on account of higher
Transmission Availability, which has been added to the ARR.
5.18 ARR after Truing Up of FY 2017-18
5.18.1 Considering the above heads of expense and revenue as per the Audited Accounts for
FY 2017-18 and after due prudence check, the net ARR and Revenue Gap/(Surplus)
approved after true-up for FY 2017-18 is shown in the following Table:
Table 23: ARR approved after Truing up for FY 2017-18 (Rs. Crore)
Sl.
No. Particulars Tariff Order
Proposed
by AEGCL
Approved
after truing
up
1 PGCIL Charges 534.55 509.29 509.29
2 O&M Expenses 178.29 170.20 172.91
a Employee Cost 154.58 142.33 147.64
b R&M Expenses 16.26 18.94 16.19
c A&G Expenses 7.45 8.92 9.08
4 SLDC Charges 2.60 2.56 2.56
5 Arrears of Revision of Pay 15.49
6 Depreciation 17.07 21.71 19.84
7 Interest & Finance Charges 9.41 25.02 -
8 Interest on Working Capital 23.93 27.52 30.18
9 BST for Pension Trust Fund 181.52 172.10 172.10
10 Return on Equity 16.01 15.49 15.49
53
Sl.
No. Particulars Tariff Order
Proposed
by AEGCL
Approved
after truing
up
11 Income Tax - 8.80 8.80
12 Other debits (Excl. related to Int, Dep
and O&M) - 0.90 0.01
13 Net Prior period Charges/(Credits) - (5.68) (10.89)
14 Sub Total 963.38 947.90 935.78
15 Less: Non-Tariff Income/ Other Income 85.99 195.76 193.63
16 Less: Expenses Capitalised - - -
17 Sub Total 877.39 752.14 742.15
18 Incentive on Higher Availability 12.10 3.55
19 Sharing of (Gains)/Losses (1.50) (5.58)
20 Aggregate Revenue Requirement 877.39 762.74 740.12
21
Add: Revenue Gap/(Surplus) after Truing
up for FY 2014-15 along with carrying
cost approved in MYT Order
7.43 7.43 7.43
22
Add: Revenue Gap/(Surplus) after Truing
up for FY 2015-16 along with carrying
cost approved in MYT Order
169.15 169.15 169.15
23
Add: Revenue Gap/(Surplus) after Truing
up for FY 2016-17 along with carrying
cost approved in MYT Order for recovery
in FY 2017-18 and FY 2018-19
143.35 143.35 143.35
24
Less: Transmission incentive credit bill
raised to APDCL as per observation of
AG Audit for the FY 2017-18
6.39 -
25
Add: Credit bill raised to APDCL for
excess amount of Transmission
surcharge billed to APDCL during FY
2017-18, as per observation of AG Audit
for the FY 2017-18
37.31 37.31
26 Carrying Cost
27 Net Aggregate Revenue Requirement 1,197.32 1,113.59 1,097.36
28 Revenue with Approved Tariff 1,197.32 1,194.99 1,194.99
29 Revenue Gap /(Surplus) for FY 17-18 - (81.40) (97.63)
The Revenue Surplus of Rs. 97.63 Crore approved after truing up for FY 2017-
18, with associated holding cost, has been considered for adjustment in the net
ARR of APDCL during FY 2019-20.
54
6 Annual Performance Review for FY 2018-19
6.1 Methodology for Annual Performance Review
6.1.1 The Commission had approved the ARR for FY 2018-19 vide the Tariff Order dated
March 19, 2018.
6.1.2 Regulation 10.3 of the MYT Regulations, 2015, as amended in November 2017,
specifies that the Commission shall undertake the APR and True-up for the respective
years of the Control Period from FY 2016-17 to FY 2018-19, as reproduced below:
“10.3 The scope of the annual review and True up shall be a comparison of the actual
performance of the Generating Company or Transmission Licensee or SLDC or
Distribution Licensee with the approved forecast of Aggregate Revenue Requirement
and expected revenue from tariff and charges and shall comprise the following:
…
b) Annual Review: a comparison of the revised performance targets of the
applicant for the current financial year with the approved forecast in the
Tariff order corresponding to the Control period for the current financial
year subject to prudence check including adjusting trajectories of
uncontrollable and controllable items.” (emphasis added)
6.1.3 AEGCL submitted the Annual Performance Review (APR) Petition for FY 2018-19,
supported by actual information available till September 2018 and estimated values for
the next six months. AEGCL has sought APR for FY 2018-19, with the estimated
Revenue Gap/(Surplus), to be recovered from APDCL.
6.1.4 However, from the above said Regulation, as amended in November 2017, it is clear
that the main objective of APR is to compare the estimated performance for FY 2018-
19 vis-à-vis approved forecast in the Tariff Order dated March 19, 2018. The Revenue
Gap/(Surplus) arising out of APR for FY 2018-19 shall not be passed on to the
beneficiaries, and the same shall be considered at the time of Truing-up only.
6.1.5 In the present Chapter, the Commission has analysed the submission of all the
elements of ARR vis-à-vis approved values in the Tariff Order for FY 2018-19. The
Commission has computed the Revenue Gap/(Surplus) as an indication of the
55
performance in FY 2018-19. No sharing of gains/(losses) has been undertaken at this
stage and the same shall be considered at the time of Truing up for FY 2018-19.
6.2 Transmission Loss
6.2.1 AEGCL submitted the Transmission Loss of 3.55% for FY 2018-19, as shown in the
following Table:
Table 24: Transmission Loss for FY 2018-19as submitted by AEGCL
Sl.No. Particulars Approved in
T.O. dtd 19.03.18
AEGCL Estimation
1 Energy Injected (MU) 10380.31 10167.60
2 Energy Sent Out to APDCL (MU) 9705.55 9490.00
3 Energy Sent Out to OA Consumers (MU) 317.67 317.00
4 Total Energy Sent Out 10023.22 9807.00
4 Transmission Loss (MU) 357.09 360.60
5 Transmission Loss (%) 3.44% 3.55%
Commission’s Analysis
6.2.2 It appears that the energy injected into the network is less than the energy injection
approved in the Tariff Order dated March 19, 2018. The Commission observes that the
Transmission Loss submitted by AEGCL is higher than the targeted losses approved
in the Tariff Order dated March 19, 2018.
6.2.3 The Commission approves the Transmission Loss of 3.44% for FY 2018-19 in line with
the Tariff Order, subject to prudence check at the time of Truing up.
6.3 Transmission Availability
6.3.1 AEGCL has submitted Transmission Availability for FY 2018-19 as 99.03%.
Accordingly, AEGCL has also claimed Incentive of Rs. 5.67 Cr for FY 2018-19.
Commission’s Analysis
6.3.2 Regulation 67 of the MYT Regulations, 2015 specifies Normative Transmission
Availability of 98% for full recovery of transmission charges and 98.5% for incentive
consideration. Also, the computation and payment of Transmission Charges has been
56
linked to monthly Transmission Availability computed as per Regulation 71 of the MYT
Regulations, 2015.
6.3.3 AEGCL should strive for maintaining and improving its Transmission Availability. The
computation of incentive/disincentive on account of Transmission Availability shall be
undertaken at the time of truing up for FY 2018-19 in line with the MYT Regulations,
2015.
6.4 Non-Tariff Income
6.4.1 The Commission had approved the Non-Tariff Income at Rs. 100.17 Crore for FY
2018-19 in the Tariff Order dated March 19, 2018. As against this, AEGCL has
submitted Non-Tariff Income of Rs. 99.41 Crore for FY 2018-19.
Commission’s Analysis
6.4.2 The Commission provisionally considers Non-Tariff Income of Rs. 99.41 Crore, as
submitted by AEGCL. The actual Non-Tariff income will be allowed at the time of truing
up, subject to prudence check.
6.5 PGCIL Charges
6.5.1 AEGCL has submitted PGCIL Charges of Rs. 511.64 Crore for FY 2018-19, as against
PGCIL charges of Rs. 526.33 Crore approved for FY 2018-19 in the Tariff Order dated
March 19, 2018. AEGCL has projected the PGCIL charges for FY 2018-19, considering
the actual bills received up to September, 2018, and projected the bills to be received
against PGCIL Charges from October, 2018 to March, 2019.
Commission’s Analysis
6.5.2 The Commission has considered the PGCIL charges for FY 2018-19 based on the
actual bills received up to September, 2018, and projected the bills from October, 2018
to March, 2019 based on the average monthly PGCIL charges. However, the
Commission will allow PGCIL Charges on actual basis based on the prudence check
at the time of true up.
6.5.3 Therefore, the Commission provisionally considers PGCIL Charges of Rs.511.60
Crore for APR of FY 2018-19.
57
6.6 Operation and Maintenance Expenses
6.6.1 AEGCL submitted that O&M expenses for FY 2018-19 have been computed on the
basis of revised estimates for FY 2018-19 and consist of following heads:
a) Employee expenses
b) R&M expenses
c) A&G expenses
The claim of AEGCL under various heads of O&M expenses are discussed below:
6.6.2 Employee Expenses
AEGCL has estimated Employee Expenses considering trend of past year’s employee
expense, increase in dearness allowance, and its impact on other allowances such as
HRA, field allowances, PF, etc. Additionally, AEGCL considered increase in salary due
to regular increments as well as promotion and new recruitments. The employee
expenses have been estimated during FY 2018-19 based on actual salaries paid
during first six months. For the next six months, it has been estimated based on the2%
increase on account of increase in DA from the month of Jan, 2019 onwards. The
estimates include Rs. 22.45 crore being actual payment made on account of arrears
due to ROP, 2017 for 18 months and Rs. 2.35 crore being the provision for arrear due
to ROP, 2017 for remaining 2 months assumed to be paid in the month of Jan, 2019.
AEGCL has estimated the Employee Expenses of Rs. 170.94 Crore for FY 2018-19,
including SLDC employee expenses of Rs. 2.74 crore.
6.6.3 R&M Expenses
AEGCL submitted that R&M expenses are directly related to age of the assets, and its
wear and tear during the period. The current infrastructure of transmission system is
old and the majority of the assets has already lapsed their life. To maintain the assets
in a more efficient way, AEGCL has been carrying out the repair and maintenance
activities. Considering past trends, the expenditure for FY 2018-19 will increase due to
presence of vintage assets, which require periodical and higher repairs. AEGCL has
considered the actual R&M expenses incurred during first 6 months plus estimate for
the next 6 months. AEGCL submitted that the R&M works on assets during H1 is
minimal on account of monsoon.
AEGCL has estimated R&M expenses of Rs. 15.26 Crore for FY 2018-19, as against
the R&M Expenses of Rs. 18.00 Crore approved in the Tariff Order dated March 19,
2018 including SLDC charges of Rs. 0.12 crore.
58
6.6.4 A&G Expenses
AEGCL has considered the actual expenses incurred during 6 months plus estimated
for 6 months. AEGCL has projected the A&G Expenses of Rs. 9.92 Crore for FY 2018-
19, as against the A&G Expenses of Rs. 6.90 Crore for FY 2018-19 approved in the
Tariff Order dated March 19, 2018, including SLDC Charges of Rs. 0.63 crore.
Commission’s Analysis
6.6.5 The Commission has approved the O&M Expenses on normative basis in the Tariff
Order as per Regulation 68.9 of MYT Regulations, 2015. AEGCL has submitted O&M
expenses based on previous year’s O&M expenses and applicable increase towards
Salaries, Dearness Allowance, etc.
6.6.6 For computation of normative employee expenses for FY 2018-19, the Commission
has adopted the following approach:
e) The normative employee expenses approved for FY 2017-18 have been
considered as base expenses for FY 2018-19.
f) CPI inflation has been computed as average increase of CPI for the period from
FY 2015-16 to FY 2017-18, which works out to 4.28%.
g) Considering the expansion of transmission network over the FY 2017-18, growth
factor of 1% has been considered as per the MYT Order.
h) Employee expenses for SLDC have been considered same as submitted by
AEGCL. Employee expenses for Transmission have been derived after deducting
the employee expenses for SLDC from normative employee expenses.
6.6.7 The normative employee expenses approved for FY 2018-19 is shown in the following
Table:
Table 25: Approved Employee Expenses for FY 2018-19 (Rs. Crore)
Particulars APR
FY 2018-19
Actual Employee Expenses for the previous year EMPn-1 149.74
Growth factor Gn 1.00%
CPI Inflation CPI 4.28%
Employee expenses (excluding RoP) 157.67
Revision of Pay 24.80
Normative Employee Expenses (excluding RoP) 157.67
Employee expenses -Transmission 155.48
Employee expenses -SLDC 2.19
59
6.6.8 For computation of normative R&M Expenses for FY 2018-19, the Commission has
considered the following approach:
d) WPI inflation for computation of R&M Expenses works out to be 2.33% as per MYT
Regulations, 2015, based on average increase of WPI for the period from FY 2016-
17 to FY 2017-18, after excluding the negative WPI of FY 2015-16.
e) K-factor has been considered as 1.01% as approved in MYT Order. Since, K-factor
has been computed on the basis of average GFA, for working out R&M expenses
for FY 2018-19, average GFA for previous year has been considered.
f) R&M expenses for SLDC have been considered same as submitted by AEGCL.
R&M expenses for Transmission have been derived after deducting R&M
expenses for SLDC from normative R&M expenses.
6.6.9 The normative R&M expenses approved for FY 2018-19 is shown in the following
Table:
Table 26: Approved R&M Expenses for FY 2018-19 (Rs. Crore)
Particulars APR
FY 2018-19
Opening GFA for previous year 1,628.68
Closing GFA for previous year 1,681.83
Average GFA for previous year GFAn-1 1,655.26
K Factor K 1.01%
WPI Inflation WPI 2.33%
R&M Expenses 17.08
AMC Cost for SCADA/EMS
Net Normative R&M Expenses 17.08
R&M Expenses - Transmission 16.96
R&M Expenses - SLDC 0.12
6.6.10 For computation of A&G expenses for FY 2018-19, the Commission has adopted the
following approach:
d) The normative A&G expenses approved for FY 2017-18 have been considered as
base expenses for computation of normative A&G expenses for FY 2018-19.
e) As discussed in earlier para, the Commission has considered the WPI inflation of
2.33%.
f) A&G expenses for SLDC have been considered same as submitted by AEGCL.
A&G expenses for Transmission have been derived after deducting the A&G
expenses for SLDC from normative A&G expenses.
6.6.11 The normative A&G expenses approved for FY 2018-19 is shown in the following
60
Table:
Table 27: Approved A&G Expenses for FY 2018-19 (Rs. Crore)
Particulars APR
FY 2018-19
A&G Expenses for Previous Year A&Gn-1 9.49
WPI Inflation WPI 2.33%
Provision Provision 0.00%
A&G Expenses 9.71
Additional Expenses for the Control
Period
-
Normative A&G Expenses for the year 9.71
A&G Expenses-Transmission 9.08
A&G Expenses-SLDC 0.63
6.6.12 Further, the Commission directs AEGCL to submit actual impact on account of revision
of pay, along with detailed justification and documentary evidences on basis of Audited
Accounts for FY 2018-19 at time of Truing up.
6.6.13 In view of the above, the Commission provisionally considers the O&M expenses as
shown in the following Table in the APR for FY 2018-19:
Table 28: Approved O&M Expenses for FY 2018-19 (Rs. Crore)
Particulars Proposed by
AEGCL
Approved
for APR
Total O&M Expenses 195.36 181.52
Employee Expenses 170.94 155.48
R&M Expenses 15.13 16.96
A&G Expenses 9.29 9.08
6.7 SLDC Charges
6.7.1 AEGCL submitted the SLDC Charges of Rs. 3.49 Crore for FY 2018-19 against the
approved charges of Rs. 3.61 Crore.
Commission’s Analysis
6.7.2 The Commission provisionally considers the SLDC Charges of Rs. 2.94 Crore for APR
of FY 2018-19 based on the O&M expenses of SLDC as included in the projected O&M
expenses of the Transmission Business.
61
6.8 Capital Expenditure and Capitalisation
6.8.1 AEGCL submitted that the capitalisation for FY 2018-19 has been estimated as Rs.
140.67 crore based on 6 months actual addition of assets and estimated asset addition
for the next 6 months. No infusion of equity has been considered other than equity
capital allocated in the Opening Balance Sheets (OBS) of AEGCL. The funding of
capitalisation has been considered as Rs. 61.46 crore and Rs. 79.21 crore of Grants
and Loan, respectively.
Commission’s Analysis
6.8.2 The scheme-wise capital expenditure was approved by the Commission in the Tariff
Order dated March 19, 2018. In the Tariff Order, the Commission had approved capital
expenditure and capitalisation based on information regarding latest status of works
and past trends of capital expenditure of AEGCL.
6.8.3 The Commission in Tariff Order dated March 19, 2018 had approved capitalisation of
Rs. 135.09 Crore for FY 2018-19, against which AEGCL has proposed capitalisation
of Rs. 140.67 Crore. As FY 2018-19 is almost completed, the Commission provisionally
considers the Capitalisation submitted by AEGCL for APR of FY 2018-19.
6.8.4 The Commission has accepted the funding of capitalized works, as proposed by
AEGCL, as shown in the following Table:
Table 29: Funding of capitalised works for FY 2018-19 as considered by the
Commission (Rs. Crore)
Particulars Approved
for APR
Grant 61.46
Equity 0.00
Debt 79.21
Total Capitalisation 140.67
6.9 Depreciation
6.9.1 The Commission had approved the Depreciation of Rs. 26.29 Crore for FY 2018-19 in
the Tariff Order dated March 19, 2018.As against this, AEGCL has claimed
depreciation of Rs. 19.79 Crore for FY 2018-19 for APR.
6.9.2 AEGCL submitted that it has calculated Depreciation taking into consideration of
62
opening balance of assets and provisional capitalisation during FY 2018-19. AEGCL
has not considered depreciation on assets created out of Grants.
Commission’s Analysis
6.9.3 The Commission has considered the opening GFA for FY 2018-19 equivalent to the
closing GFA for FY 2017-18 as approved in this Order. The Commission has computed
depreciation as per scheduled rates specified in the MYT Regulations, 2015.
6.9.4 As per Regulation 33 of the MYT Regulations, 2015, the total depreciation during the
life of the asset shall not exceed 90% of the original cost of Asset. The Commission
has computed the depreciation separately for assets added under each asset head in
each year. The Commission has disallowed the depreciation in excess of 90% of the
original cost of asset under different asset heads. The Commission has not considered
the depreciation on assets funded through grants, consumer contribution or capital
subsidy, for FY 2018-19.
6.9.5 The depreciation provisionally approved for FY 2018-19 in APR is given in the Table
below:
Table 30: Depreciation approved for FY 2018-19 (Rs. Crore)
Sl. Particulars Opening
GFA
Addition
during
the year
Rate of
deprec
iation
Depreciation
as per MYT
Regulations,
2015
1 Land owned under full
ownership
37.67
0.02 -
-
2 Land under lease 0.30 - 3.34% 0.00
3 Building 34.20 3.94 3.34% 0.64
4 Hydraulic 2.64 - 5.28% -
5 Other Civil Works 70.95 10.90 3.34% 2.55
6 Plant & Machinery 789.14 64.07 5.28% 39.38
7 Lines & Cable Network 734.87 61.42 5.28% 19.31
8 Vehicles 4.90 - 9.50% 0.10
9 Furniture & Fixtures 4.08 0.11 6.33% 0.15
10 Office Equipment 3.07 0.21 6.33% 0.16
11 Grand Total 1,681.83 140.67 62.29
15 Less: Depreciation for Grants/
Consumer Contribution 40.96
Net Total 21.33
6.9.6 The Commission provisionally approves Depreciation of Rs. 21.33 Crore in the APR
for FY 2018-19.
63
6.10 Interest and Finance Charges
6.10.1 The Commission had approved Interest and Finance Charges of Rs. 7.01 crore for FY
2018-19 in the Tariff Order dated March 19, 2018. As against this, AEGCL has claimed
Interest and finance Charges of Rs. 26.57 Crore for FY 2018-19.
Commission’s Analysis
6.10.2 The Commission in the Tariff Order dated March 19, 2018had approved the Interest
and Finance Charges of Rs. 7.01 Cr, on normative basis for FY 2018-19 as per
Regulation 35 of MYT Regulations, 2015. The closing net normative loan for FY 2017-
18 is considered as NIL as discussed in the earlier Chapter. Hence, the Commission
has considered the net normative loan as on April 1,2018 as Nil. The addition of loan
has been considered equal to debt portion of capitalised works as approved in this
Order. The loan repayment has been considered equivalent to Depreciation approved
in this Order.
6.10.3 As per MYT Regulations, 2015, weighted average rate of interest shall be computed
based on actual outstanding loan as on April 1, 2018. The Commission sought details
of outstanding loan as on April 1, 2018 along with documentary evidences.
Accordingly, weighted average interest rate has been computed as 9.87% for
computation of interest on loan capital.
6.10.4 The Interest on loan capital as approved by the Commission for FY 2018-19 is shown
in the following Table:
Table 31: Approved Interest on loan Capital for FY 2018-19 (Rs. Crore)
Sr.
No. Particulars
Approved
in T.O. dtd
19.03.18
AEGCL
Submission
APR FY
2018-19
1 Net Normative Opening Loan 71.08 232.13 -
2 Addition of normative loan during the year 21.85 79.21 79.21
3 Normative Repayment during the year 26.29 19.79 21.33
4 Net Normative Closing Loan 66.64 291.55 57.87
5 Interest Rate 10.18% 9.87% 9.87%
6 Interest Expenses 7.01 26.02 2.86
7 Finance Charges 0.55 -
8 Total Interest and Finance Charges 7.01 26.57 2.86
6.10.5 The Commission provisionally considers Interest on loan Capital of Rs. 2.86 Crore in
APR for FY 2018-19.
64
6.11 Return on Equity
6.11.1 The Commission approved the RoE of Rs. 16.86 Crore for FY 2018-19 in the Tariff
Order dated March 19, 2018. As against this, AEGCL has claimed RoE of Rs. 15.49
Crore for FY 2018-19, calculated at 15.5% as specified in Regulation 34 of MYT
Regulations 2015.
Commission’s Analysis
6.11.2 The Commission considers the Return on Equity in accordance with Regulation 34 of
the MYT Regulations, 2015. As stated earlier, the Commission has considered zero
addition of equity against capitalisation during FY 2018-19. Therefore, the approved
RoE at 15.50% is shown in the Table below:
Table 32: Return on Equity for FY 2018-19 approved by the Commission (Rs. Crore)
6.11.3 Accordingly, the Commission considers RoE of Rs15.49 Crore in APR for FY 2018-19.
6.12 Interest on Working Capital (IoWC)
6.12.1 The Commission approved IoWC of Rs. 30.63 Crore for FY 2018-19 in the Tariff Order
dated March 19, 2018. As against this, AEGCL has claimed IoWC of Rs. 28.82 Crore
for FY 2018-19, calculated as specified in Regulation 37.2 of MYT Regulations 2015.
Commission’s Analysis
6.12.2 The Commission has computed IoWC in accordance with Regulation 37.2 of the MYT
Regulations, 2015. The rate of Interest has been considered equal to State Bank of
India Base Rate as on 1st April, 2018 plus 350 basis points, i.e., 12.20%. For
computation of working capital requirement, normative O&M expenses including ROP
have been considered. Further, receivables have been considered equal to the
revenue approved for FY 2018-19 in MYT Order. IoWC approved by the Commission
for FY 2018-19 is shown in the following Table:
Sr.
No. Particulars
Approved
for APR
1 Opening Equity Capital 99.93
2 Equity addition during the year 0.00
3 Closing Equity 99.93
5 Rate of Return on equity 15.50%
6 Return on Equity 15.49
65
Table 33: Interest on Working Capital for FY 2018-19 as approved by the Commission
(Rs. Crore)
Sr.
No
.
Particulars AEGCL
Submission APR FY 2018-
19
1 O&M expenses for 1 month 16.28 15.13
2 Maintenance spares @ 15% of O&M Expenses 29.30 27.23
3 Receivables for two months 190.67 193.45
4 Total Working Capital 236.25 235.80
5 Rate of Interest 12.20% 12.20%
6 Interest on Working Capital 28.82 28.77
6.12.3 Accordingly, the Commission provisionally approves IoWC of Rs. 28.77 Crore in the
APR for FY 2018-19.
6.13 BST for Pension Fund
6.13.1 The Commission had approved BST for Pension fund at 20 paise per unit amounting
to Rs. 187.22 Crore for FY 2018-19 in the MYT Order. AEGCL has claimed BST for
Pension Fund of Rs. 189.80 Crore as per the estimated energy supplied to APDCL for
FY 2018-19.
Commission’s Analysis
6.13.2 The Commission approves BST for Pension Fund at 20 paise per unit on the energy
transmitted to APDCL, as approved in the Tariff Order on APR of APDCL dated March
19, 2018, as shown in the following Table:
Table 34: Approved BST for Pension Fund for FY 2018-19 (Rs. Crore)
Particulars FY 2018-19
Energy transmitted to APDCL (MU) 9490
BST for Pension Fund at 20 paise per unit 189.80
6.14 Income Tax
6.14.1 AEGCL has not claimed any amount towards Income Tax for FY 2018-19.
Commission’s Analysis
6.14.2 The Commission has not considered any provision towards Income Tax. The actual
66
Income Tax paid shall be considered based on the documentary evidence submitted
at the time of truing up of FY 2018-19, subject to prudence check.
6.15 Other Debits, Prior Period Expenses/(Income), and Incentive
6.15.1 AEGCL has considered Other Debits of Rs. 0.01 crore and Prior Period Income of Rs.
1.31 crore for FY 2018-19. AEGCL has also claimed incentive of Rs. 5.67 crore on
projected higher Availability than normative Availability during FY 2018-19.
Commission’s Analysis
6.15.2 AEGCL has not provided any explanation for the Other Debits projected for FY 2018-
19. Further, the Prior Period entries will get crystallised only after finalisation of
Accounts for FY 2018-19, and cannot be considered at the time of APR. Also, the
incentive on Transmission Availability can be computed only after the year is
completed and needs to be certified by the SLDC, in order to be considered for
incentive.
6.15.3 Hence, the Commission has not considered any Other Debits, Prior Period
Expenses/(Income), and Incentive on Transmission Availability in the APR for FY
2018-19. The actual Other Debits, Prior Period Expenses/(Income), and Incentive on
Transmission Availability, if any, shall be considered based on the documentary
evidence submitted at the time of truing up of FY 2018-19, subject to prudence check.
6.16 ARR after Annual Performance Review of FY 2018-19
6.16.1 Considering the above heads of expense and revenue, the net ARR approved after
APR for FY 2018-19 is shown in the following Table:
Table 35: ARR approved after APR for FY 2018-19 (Rs. Crore)
Sl.
No
.
Particulars
Tariff
Order dt.
March 19,
2018
Proposed
by
AEGCL
Approved
after APR
1 PGCIL Charges 526.33 511.64 511.60
2 O&M Expenses 183.79 195.36 181.52
a Employee Cost 158.89 170.94 155.48
b R&M Expenses 18.00 15.13 16.96
67
Sl.
No
.
Particulars
Tariff
Order dt.
March 19,
2018
Proposed
by
AEGCL
Approved
after APR
c A&G Expenses 6.90 9.29 9.08
3 SLDC Charges 3.61 3.49 2.94
4 Arrears of Revision of Pay 25.30 - 24.80
5 Depreciation 26.29 19.79 21.33
6 Interest & Finance Charges 7.01 26.57 2.86
7 Interest on Working Capital 30.63 28.82 28.77
8 BST for Pension Trust Fund 187.22 189.80 189.80
9 Return on Equity 16.86 15.49 15.49
10 Income Tax - - -
11 Other Debits - 0.01 -
12 Net Prior period
Charges/(Credits) - (1.31) -
13 Less: Non-Tariff Income 100.17 99.41 99.41
14 Less: Expenses Capitalised - - -
15 Sub Total 906.86 890.24 879.69
16 Incentive on Higher
Availability 5.67 -
17 Aggregate Revenue
Requirement 906.86 895.91 879.69
18
Add: Revenue
Gap/(Surplus) after Truing
up for FY 2016-17 along
with carrying cost approved
in MYT Order for recovery
in FY 2017-18 and FY
2018-19
188.00 188.00 188.00
19 Carrying Cost 65.77 65.77 65.77
20 Net Aggregate Revenue
Requirement 1,160.63 1,149.68 1,133.46
21 Revenue with Approved
Tariff 1,160.64 1,160.70 1,160.70
22 Revenue Gap /(Surplus)
for FY 2018-19 (0.00) (11.02) (27.24)
6.17 Revenue Gap/(Surplus) for FY 2018-19
6.17.1 AEGCL has claimed Revenue Surplus of Rs. 11.02 Crore after APR for FY 2018-19.
68
Commission’s Analysis
6.17.2 The Commission has computed the Revenue Gap/(Surplus) arising out of APR for FY
2018-19 as shown in the following Table:
Table 36: Revenue Gap/(Surplus) after APR for FY 2018-19 (Rs. Crore)
Sr.
No. Particulars
Proposed by
AEGCL
Approved
after APR
1 Net ARR 1,149.68 1,133.46 2 Revenue with Approved Tariff 1,160.70 1,160.70 3 Revenue Gap/(Surplus) (11.02) (27.24)
6.17.3 The APR reveals a surplus of Rs. 27.24 crore for FY 2018-19. It is only indicative, in
the absence of Audited Annual Accounts for FY 2018-19. It will be considered during
the Truing up process for FY 2018-19, after the Audited Annual Accounts are made
available.
69
7 CAPITAL INVESTMENT PLAN OF AEGCL FOR FY
2019-20 TO FY 2021-22
7.1 Capital Investment Plan of AEGCL
7.1.1 AEGCL has submitted the Capital Investment Plan (CIP) for the Control Period from
FY 2019-20 to FY 2021-22 against various Projects grouped under the following major
Schemes, viz.,
a) ADB
b) NERPSIP
c) Annual Plan
d) PSDF
e) TDF
f) NEC
g) NLCPR
h) Other Works
7.1.2 The Scheme Wise projects, year-wise capital expenditure and capitalization, mode of
funding, and requirement of the project, as submitted by AEGCL are discussed in the
following Sections, along with the Commission’s analysis and approval.
7.2 Asian Development Bank (ADB) Scheme
7.2.1 AEGCL has proposed the following works under Assam Power Development Program,
Phase -III with financial assistance from ADB to meet the demand under 24x7 Power
for All:
a) Capacity addition in transmission by construction of new transmission lines of
voltage class 400kV, 220 kV and 132 kV;
b) Evacuation of Power from State owned Generator, i.e., Lower Kopili Hydro
Electric Project (120 MW), by upgradation of the nearest 132/33kV
Shankardebnagar substation to 220kV with associated transmission lines from
LKHEP;
c) Communication System (Optical Ground Wire);
d) Augmentation of Switching Scheme by converting existing Air Insulated
Substation (AIS) to Gas Insulated Substations (GIS);
e) Capacity augmentation of old and critical Transmission lines by High Temperature
Low Sag (HTLS) conductors;
f) 23 New Substations;
70
g) New Transmission Lines to feed the 23 New Substations;
h) Augmentation and Extension of existing substations to meet the projected peak
demand and limit the transformer loading;
i) Ongoing Project to convert Gohpur 132/33 kV Air Insulated Substation (AIS) to
GIS
j) Upcoming Projects under ADB
Table 37: Summary of Capital Expenditure and Capitalisation projected by AEGCL
against ADB Projects (Rs. Crore)
Particulars Project
Cost
Capital Expenditure Capitalisation
FY
2019-20
FY
2020-21
FY
2021-22
FY
2019-20
FY
2020-21
FY
2021-22
New Substations 2627.12 1204.96 1096.36 325.80 - - 1420.34
New Transmission
Lines 1230.89 492.36 369.27 369.27 - - -
New Transmission
lines (Missing
Links)
43.45 13.04 13.04 17.38 - - 37.78
Augmentation &
Reconductoring 609.09 274.71 228.52 105.86 0.40 198.84 230.21
Total 4510.56 1985.06 1707.19 818.31 0.40 198.84 1688.33
Table 38: Funding of ADB Projects as Proposed by AEGCL
Particulars Funding
Pattern
Control Period
FY
2019-20
FY
2020-21
FY
2021-22 Total
Capital Expenditure
Counterpart Funding 20% 400.30 341.40 163.70 905.40
Remaining Part
Grant (ADB) 90% 1441.20 1229.20 589.20 3259.60
Debt (ADB) 10% 160.10 136.60 65.50 362.20
Total Capex 2001.60 1707.20 818.40 4527.20
Capitalisation
Counterpart Funding 20% 22.20 39.80 337.70 399.70
Remaining Part
Grant (ADB) 90% 80.00 143.20 1215.60 1438.70
Debt (ADB) 10% 8.90 15.90 135.10 159.90
Total Capitalisation 111.10 198.90 1688.40 1998.30
71
7.3 Power System Development Fund (PSDF)
7.3.1 The Ministry of Power (MoP) Government of India (GoI) sought project proposals from
all the State Utilities and Central Utilities for Renovation and Up-gradation of the
protection systems of their grid. Accordingly, AEGCL proposed and submitted a
Detailed Project Report (DPR) to the GoI, which accorded sanction as grant under
Power System Development Fund (PSDF).
Table 39: Summary of PSDF Projects and Capitalization as projected by APDCL (Rs.
Crore)
Particulars
Capital Expenditure Capitalisation
FY
2019-20
FY
2020-21
FY
2021-22
FY
2019-20
FY
2020-21
FY
2021-22
R&U 79.00 - - 73.40 15.80 -
R&U-BCU 1.00 - - 4.50 0.20 -
Total 80.00 - - 77.90 16.00 -
Table 40: Funding of PSDF Projects as projected by APDCL (Rs. Crore)
Capital Expenditure Funding FY
2019-20
FY
2020-21
FY
2021-22
GoI – PSDF 100% 80.0 - -
7.4 Trade Development Fund (TDF)
7.4.1 AEGCL proposed the construction of 132/33 kV Barpeta substation with 132 kV S/C
line on D/C tower from Barnagar, which also includes installation of PLCC equipment
at both ends of the line for smooth operation and proper monitoring of the system.
AEGCL also proposed the construction of the 132/33 kV Hatsingimari substation with
116 km of 132 kV S/C line on D/C tower from Agia.
Table 41: Summary of TDF Projects and Capitalisation as projected by AEGCL (Rs.
Crore)
Particulars
Capital Expenditure Capitalisation
FY
2019-20
FY
2020-21
FY
2021-22
FY
2019-20
FY
2020-21
FY
2021-22
Barpeta SS 79.00 - - 73.40 15.80 -
Hatsingimari SS 1.00 - - 4.50 0.20 -
Sub-Station Total 80.00 - - 77.90 16.00 -
Construction of 132 kV 7.82 - - 21 - -
72
Particulars
Capital Expenditure Capitalisation
FY
2019-20
FY
2020-21
FY
2021-22
FY
2019-20
FY
2020-21
FY
2021-22
S/C line on D/C tower
from Salakati to APM
Construction of 132 kV
LILO from Dhaligaon
Barnagar line
3.29 - - 14.38 - -
Construction of 132 kV
S/C line on D/C tower
from Agia to Hatsingimari
(Package_A)
3.89 - - 22.52 - -
Construction of 132 kV
S/C line on D/C tower
from Agia to Hatsingimari
(Package-B)
2.52 - - 24.33 - -
Construction of 132 kV
S/C line on D/C tower
from Hailakandi to
Karimganj
5.25 3.15 - - 12.34 -
Transmission Lines
Total 7.82 3.15 - 82.23 12.34 -
Table 42: Funding of TDF Projects as projected by AEGCL (Rs. Crore)
Particulars Funding FY
2019-20
FY
2020-21
FY
2021-22
Capital Expenditure
GoA- Grant 100% 41.80 3.20 -
Capitalisation
GoA- Grant 100% 101.2 12.3 -
7.5 Annual Plan
7.5.1 AEGCL has proposed the following works under Annual Plan:
a) Augmentation of 132 kV and 33 kV Buses of 132/33 kV Depota, Rowta, Barnagar
and Chandrapur sub-stations from Strung Bus to Aluminium Tube Bus
b) Augmentation of transformer capacity of 132/33 kV Dhemaji sub-station from 1x16
MVA + 1x10 MVA to 2x50 MVA.
c) Augmentation of transformer capacity of 132/33 kV Rowta sub-station from 2x25
MVA to 2x50 MVA
d) Augmentation of transformer capacity of 132/33 kV Sipajhar sub-station from 2x16
MVA to 2x50 MVA.
73
e) 2nd Circuit stringing of 132kV, 10.268 KM long BTPS – Kokrajhar line on D/C
tower with HTLS conductor.
f) 2nd Circuit stringing of 132kV, 24.201 KM long Kokrajhar - Bilasipara line on D/C
tower.
g) 2nd Circuit Stringing of 132kV, 41.923 km long Samaguri – Khalaigaon (Nagaon)
line on D/C tower
h) 132/33 kV, 1x50 MVA transformer with switchyard equipment, etc., for Ghoramari
sub-station.
i) State support to execute the project under PSDF of the Govt. of India.
j) State Govt support to execute the project under PSDF of the Govt. of India
amounting to Rs. 13.08 Crore.
k) Projects executed through Annual Plan Budgetary allocation for FY 2019-20
l) Implementation of Integrated Information System in the form of Enterprise
Resource Planning (ERP) system across the organization to ensure smooth
operation through deployment of various resources (Man, Material, Machine, etc.)
in effective manner under the funding mode of Annual Plan.
Estimated Project Cost:
▪ Project Management Consultant: Rs. 2.00 Crore
▪ ERP Implementation Cost: Rs. 30.00 Crore.
7.5.2 Projects proposed under Annual Plan for FY 2020-21 to FY 2021-22:
a) Stringing of 2nd circuit of 132 kV Bilasipara and Gauripur.
b) Conversion of ACSR conductor of 132 kV Nalkata - Dhemaji line by HTLS.
c) Procurement of ERS (4 Nos.)
d) Construction of 132 kV single circuit Hazo - Sualkuchi line.
e) Construction of 132 kV Sualkuchi substations.
f) Construction of 132 kV single circuit Teok – Gaurisagar line.
7.5.3 Currently, following projects of AEGCL are ongoing under Annual Plan:
a) Augmentation of transformer capacity of 132/33 kV Silchar (Srikona) sub-
station from 2x25 MVA to 2x40 MVA
b) Augmentation of transformer capacity of 220/132 kV Sarusajai sub-station from
3x100 MVA to 2x200 MVA + 1x100 MVA.
c) Procurement of two number 132/33 kV, 40 MVA transformers, fire fitting system
and DG set for 132/33 kV on-going Azara sub-station with erection, testing &
commissioning of the same as well as construction of fire protection wall.
74
d) 132 kV line termination bays at BTPS and APM sub-stations for termination of
132 kV S/C BTPS – APM line on D/C tower.
Table 43: Funding of Annual Plan Projects as projected by AEGCL (Rs. Crore)
Particulars Funding FY
2019-20
FY
2020-21
FY
2021-22
Capital Expenditure
GoA- Debt 100% 53.70 63.10 70.40
Capitalisation
GoA- Debt 100% 27.80 83.20 62.20
7.6 NERPSIP
7.6.1 GOI sanctioned the “North Eastern Region Power System Improvement Project”
(NERPSIP) on 01.12.2014 for six North Eastern Region States (Assam, Meghalaya,
Manipur, Tripura, Nagaland and Mizoram) for strengthening of Intra-State
Transmission and Distribution System. The Scheme is implemented as Central Sector
Scheme through POWERGRID with completion schedule of 48 months from the date
of release of 1st instalment of funds to PGCIL. The Implementation/Participation
Agreement between Assam (AEGCL/APDCL) and PGCIL was signed on 29th May,
2015. The project is funded 50% through World Bank funds and 50% by GoI through
MoP budget.
7.6.2 In the scope of NERPSIP-Assam, the following are being done by POWERGRID:
a) Eleven (11) nos. of new EHV Sub stations of which three (3) will be GIS and
rest will be AIS.
b) Bay extension of Six (6) nos. of Substations at Dhemaji, Sonabil, Tinsukia,
Rupai, Kahilipara and Kamakhya.
c) Augmentation of two (2) existing sub stations at Samaguri and Dhaligaon.
d) The scheme also involves Turnkey Tower Package at various locations.
e) Approximately 740 km of OPGW including existing and new Transmission lines
(216 km).
f) Capacity Building and Institutional Strengthening of Assam electricity
transmission and distribution scenario has been taken up.
75
Table 44: Funding of NERPSIP Projects as projected by AEGCL (Rs. Crore)
Particulars Funding Pattern FY
2019-20
FY
2020-21
FY
2021-22
Capital Expenditure
GoI- Grant 50% 127.50 59.20 -
World Bank- Grant 50% 127.50 59.20 -
Total 255.00 118.40 -
Capitalisation
GoI- Grant 50% 253.40 83.90 -
World Bank- Grant 50% 253.40 83.90 -
Total 506.80 167.7- -
7.7 NEC
7.7.1 AEGCL has proposed the following works under NEC:
a) Construction of 132 kV S/C North Lakhimpur – Silapather line on D/C tower
(121 km long) with line terminal bays at North Lakhimpur and Silapather sub-
stations.
b) 132/33 KV, 1x50 MVA Mobile sub-station
Table 45: Summary of Capital Expenditure and Capitalisation under NEC Projects as
projected by AEGCL (Rs. Crore)
Particulars
Capital Expenditure Capitalisation
FY
2019-20
FY
2020-21
FY
2021-22
FY
2019-20
FY
2020-21
FY
2021-22
Construction of
132 kV S/C North
Lakhimpur –
Silapather line on
D/C tower
15.00 30.00 35.00 - - -
132/33 kV, 1x50
MVA Mobile
Substation
8.00 15.07 - - 23.07 -
Table 46: Funding of NEC Projects as projected by AEGCL (Rs. Crore)
Particulars Funding FY
2019-20
FY
2020-21
FY
2021-22
Capital Expenditure
GoI- Grant 90% 20.70 40.60 31.50
GoA- Debt 10% 2.30 4.50 3.50
76
Particulars Funding FY
2019-20
FY
2020-21
FY
2021-22
Total 23.00 45.10 35.00
Capitalisation
GoI- Grant 90% - 20.80 -
GoA- Debt 10% - 2.30 -
Total - 23.10 -
7.8 Other Capital Projects
a) Renovation of AEGCL Quarters for employees at a cost of Rs. 5.67 crore each in
FY 2019-20 and FY 2020-21 at a debt:equity ratio of 70:30.
b) Provision for Compound Wall at Sub-station and colony to prevent encroachment
and theft of equipment at a cost of Rs. 5.10 crore each in FY 2019-20 and FY
2020-21, and Rs. 6.80 crore in FY 2021-22 at a debt:equity ratio of 70:30
c) Provision for New Guest Houses at Substation locations at a cost of Rs. 2.40 crore
each in FY 2019-20 and FY 2020-21, and Rs. 3.20 crore in FY 2021-22 at a
debt:equity ratio of 70:30
d) Provision for Colony Roads at a cost of Rs. 4.80 crore each in FY 2019-20 and FY
2020-21, and Rs. 6.40 crore in FY 2021-22 at a debt:equity ratio of 70:30
e) Provision for Vehicles at Various Sites at a cost of Rs. 1.00 crore each in FY 2019-
20 and FY 2020-21at a debt:equity ratio of 70:30
7.9 Summary of Capital Expenditure and Capitalisation
7.9.1 The summary of scheme-wise Capital Expenditure and Capitalization projected by
AEGCL for the Control Period is summarized in the Tables below:
Table 47: Summary of Capital Expenditure and Capitalisation projected by AEGCL for
Control Period (Rs. Crore)
Scheme Name FY 2019-20 FY 2020-21 FY 2021-22 Total
Capital Expenditure
ADB 2001.69 1707.19 818.31 4527.19
NERPSIP 254.94 118.42 - 373.37
Annual Plan 53.65 63.10 70.40 187.15
PSDF 80.00 - - 80.00
TDF 41.77 3.15 - 44.92
NEC 23.00 45.07 35.00 103.07
77
Scheme Name FY 2019-20 FY 2020-21 FY 2021-22 Total
NLCPR - - - -
Sub-total Projects 2455.06 1936.93 923.71 5315.70
Other Works 19.92 19.92 17.00 56.84
TOTAL AEGCL 2474.98 1956.85 940.71 5372.54
Capitalisation
ADB 111.09 198.84 1688.33 1998.26
NERPSIP 506.76 167.74 - 674.49
Annual Plan 27.83 83.16 62.21 *173.20
PSDF 77.90 16.00 - *93.90
TDF 101.23 12.34 - 113.57
NEC 23.07 - *23.07
NLCPR - - - *0.00
Sub-total Projects 824.81 501.15 1750.54 *3076.50
Other Works 19.92 19.92 17.00 56.84
TOTAL AEGCL 844.73 521.07 1767.54 *3133.34
Note: * - Summation errors in AEGCL’s Petition have been corrected
7.10 Capital Investment Plan approved by the Commission for FY 2019-20 to FY
2021-22
7.10.1 The Commission while approving the capital expenditure and capitalization for FY
2017-18 and FY 2018-19 in the MYT Order dated March 31, 2017, had directed
AEGCL to submit the scheme-wise/project-wise capital expenditure and capitalisation,
along with funding details based on latest status of implementation of schemes,
approvals received, funds arranged, orders placed, work commencement, timelines
committed by contractor, etc., as compared to the schemes approved in the Business
Plan for the Control Period from FY 2016-17 to FY 2018-19. However, such detailed
scheme-wise information has not been submitted to the Commission.
7.10.2 The Commission also asked AEGCL to submit the Cost-Benefit-Analysis (CBA) of the
Schemes/Projects proposed for the Control Period, so that a considered view could be
taken on approving the Schemes. AEGCL submitted the following CBA for Projects
under ADB Scheme:
78
Table 48: Cost Benefit Analysis for ADB Schemes submitted by AEGCL
Particulars Units Amount
Additional Energy handled per year at end of FY 2021-22 MU 4867
Peak Load Loss Reduction MW 115.81
Energy Loss Reduction per year (at 0.56 Load Factor) MU 568
O&M Charges % 1
Salvage Value % 10
Investment & Gross Return
Total Project Cost Rs. Crore 3977.07
Total benefit due to additional sale of energy Rs. Crore 316.36
Total benefit due to reduction of technical losses Rs. Crore 369.20
Gross Return per year after implementation Rs. Crore 685.56
Internal Rate of Return (IRR) % 15.48%
7.10.3 The Commission has not attempted to verify the computations submitted by AEGCL
as regards additional energy handled and annual loss reduction. However, it is noted
that AEGCL has provided the CBA for all ADB Schemes as a group. In other words,
the above-stated benefits will be achieved as per AEGCL, only if all the Projects
proposed under ADB Scheme are approved and taken up, and is some Projects are
not approved/taken up, then the benefits may not be achieved. The Commission is of
the view that such presentation of CBA cannot be used, as a decision has to be taken
on the need and benefit of each and every Project, rather than the Scheme as a whole.
7.10.4 The Commission has analysed the details of different Schemes proposed by AEGCL
for the Control Period from FY 2019-20 to FY 201-22, and observes as under:
a) Some of the Schemes proposed by APDCL are ongoing Schemes;
b) Most of the Schemes are Central Government Schemes, viz., NERPSIP,
PSDF, TDF, and NEC, or State Government Schemes, viz., State Annual Plan;
c) All the above Schemes are intended to strengthening the transmission network,
facilitate evacuation of power, improvement of the quality of supply, etc.;
d) Most of the Schemes are either 100% Grant funded or 90% Grant funded, and
the funds have been tied-up for all the ongoing Schemes;
e) The ADB Scheme is the largest Scheme, but the DPR is yet to be even
forwarded to ADB for approval, and thus, the funds tie-up will take significant
amount of time.
79
7.10.5 In view of the above, the Commission provisionally approves the Scheme-wise Capital
Investment Plan as proposed by AEGCL, and summarised in the Table below:
Table 49: Capital Investment Plan provisionally approved by the Commission for the
Control Period for AEGCL (Rs Crore)
Scheme Name FY 2019-20 FY 2020-21 FY 2021-22 Total
Capital Expenditure
ADB 2001.69 1707.19 818.31 4527.19
NERPSIP 254.94 118.42 - 373.37
Annual Plan 53.65 63.10 70.40 187.15
PSDF 80.00 - - 80.00
TDF 41.77 3.15 - 44.92
NEC 23.00 45.07 35.00 103.07
NLCPR - - - -
Sub-total Projects 2455.06 1936.93 923.71 5315.70
Other Works 19.92 19.92 17.00 56.84
TOTAL AEGCL 2474.98 1956.85 940.71 5372.54
7.10.6 AEGCL is directed to maintain database on the individual Projects under each
Scheme with the following details:
a) Details/Scope of Project including activities, area covered, etc.;
b) Start date of Project;
c) Scheduled completion date of Project;
d) Funding Plan;
e) Cost-Benefit-Analysis of the Project
f) Present Status of Project, indicating physical progress in percentage terms
and in monetary terms;
g) Status of Capitalisation as per Field Reports and as per Accounts;
h) Whether the intended benefits of the Project have been achieved, etc.
7.10.7 Maintenance of such project-wise database will help AEGCL track the progress of the
Project during execution as well as ensure that the Capitalisation as per Accounts
tallies with the asset being physically put to use. AEGCL should submit such Project-
wise data to the Commission at the time of true-up for each Year, for the Projects that
have been capitalised during that Year. AEGCL should also justify the Projects
proposed to be capitalised in the ensuing Year based on the above database.
80
7.11 Capitalisation approved by the Commission for FY 2019-20 to FY 2021-22
7.11.1 During the TVS, the Commission asked AEGCL to submit the latest status of
implementation of projects/schemes, approvals received, funds arranged, orders
placed, work commencement, timelines committed by contractor, etc. However,
AEGCL has not been able to substantiate the significantly high Capital Expenditure
and Capitalisation projected for the Control Period based on latest status.
7.11.2 It is noted that however, the actual capital expenditure and capitalisation are both
significantly lower than that originally proposed by AEGCL in its respective Business
Plan/Tariff Petitions. This shows that AEGCL has been generally projecting much
higher capital expenditure and capitalisation than that actually achieved/achievable,
which needs to be borne in mind, while approving the capital expenditure and
capitalisation for the Control Period from FY 2019-20 to FY 2021-22.
7.11.3 The comparison of proposed vs. approved vs. actual capital expenditure and
capitalisation over the period from FY 2012-13 to FY 2017-18 is shown in the Table
below:
Table 50: Actual Capital Expenditure and Capitalisation achieved by AEGCL
from FY 2012-13 to FY 2017-18 (Rs. Crore)
Particulars FY 13 FY 14 FY 15 FY 16 FY 17 FY 18
Capital Expenditure
Proposed by AEGCL in
Business Plan/ Tariff
Petition
255.96 272.30 1248.60 429.83 371.72 376.87
Approved in respective
Order 255.96 272.30 263.57 429.83 65.75 165.07
Actual
Capitalisation
Proposed by AEGCL in
Business Plan/ Tariff
Petition
103.42 278.14 291.80 429.83 388.47 307.50
Approved in respective
Order 103.42 60.26 84.11 198.79 82.36 303.79
Actual 21.22 60.26 83.86 191.09 84.09 55.93
7.11.4 From the above Table, it is seen that the average Capitalisation achieved over this
period is Rs. 95 crore, with the maximum capitalisation of Rs. 191 crore being achieved
in FY 2015-16, and a minimum capitalisation of Rs. 55.93 crore. The average
Capitalisation over the recent three-year period from FY 2015-16 to FY 2017-18
amounts to Rs. 110 crore. The average Capital Expenditure over the same period
81
works out to Rs. 177 crore.
7.11.5 The Commission observes that there appears to be a disconnect in the Accounting of
the capital expenditure and capitalisation, as many times, the asset may be physically
completed and electrically charged, but due to some minor accounting related issues,
the asset is unable to be capitalised in the Accounts of APDCL. As a result, the tariff
recovery for such assets is delayed, even though the asset is functional and has been
put to use for the benefit of the consumers.
7.11.6 AEGCL should seriously investigate this matter and initiate measures to complete the
capitalisation as per accounts at the earliest, for schemes that have commenced quite
some time ago. If this is done, the amount of CWIP is likely to reduce significantly and
the amount of GFA shall increase correspondingly.
7.11.7 Against the above background, the capital expenditure proposed by AEGCL for each
year of the Control Period at Rs. 2475 crore, Rs. 1957 crore, and Rs. 941 crore, and
proposed capitalisation of Rs. 845 crore, Rs. 521 crore, and Rs. 1768 crore appear
unrealistic.
7.11.8 The Commission has hence, approved Capital Expenditure and Capitalisation for the
Control Period, for the purpose of approval of ARR and Transmission Tariff, based on
information regarding latest status of works and past trends of capital expenditure of
AEGCL.
7.11.9 Accordingly, the Commission has considered average annual Capital Expenditure of
Rs. 175 crore and average annual Capitalisation of Rs. 140 crore, for the purpose of
determination of ARR and Transmission Tariff, as shown in the Table below:
Table 51: Capital Expenditure and capitalisation approved by the Commission for the
Control Period (Rs. Crore)
Particulars FY 2019-20 FY 2020-21 FY 2021-22
Capital Expenditure 175.00 175.00 175.00
Capitalisation 140.00 140.00 140.00
7.11.10 The Commission clarifies that the approach adopted by the Commission does
not bar AEGCL from implementing the schemes as approved in the Capital Investment
Plan for the Control Period from FY 2019-20 to FY 2021-22. In case AEGCL achieves
higher Capital Expenditure and Capitalisation, the same may be submitted at the time
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of truing up for the respective year.
7.11.11 The Commission has considered the funding of capitalisation in the same ratio
as proposed by AEGCL, i.e., Grant funding has been considered as 79%, 67%, and
69% of the assets added in FY 2019-20, FY 2020-21, and FY 2021-22, respectively.
The balance has been considered to be funded by loans, and no equity addition has
been considered.
7.11.12 The funding of capitalised works as approved by the Commission is shown in
the following Table:
Table 52: Funding of Capitalisation approved by the Commission for the Control Period
(Rs. Crore)
Particulars FY 2019-20 FY 2020-21 FY 2021-22
Grant/Consumer Contribution 110.15 93.41 96.28
Equity 0.00 0.00 0.00
Debt 29.85 46.59 43.72
Total Capitalisation 140.00 140.00 140.00
Therefore, the Commission approves Capitalisation of Rs. 140 crore for each
Year of the Control Period.
AEGCL is directed to submit the necessary detail as identified in para 7.11.6
above for all ongoing projects at the time of true-up and Tariff for ensuing year.
Further, for all Projects that have not commenced by March 31, 2019, AEGCL
shall obtain the Commission’s prior approval based on the necessary detail as
identified in para 7.11.6, even if in-principle approval has been received.
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8 ARR for AEGCL for the MYT Control Period from
FY 2019-20 to FY 2021-22
8.1 Introduction
8.1.1 This Chapter deals with the approval of ARR of AEGCL for the MYT Control Period
from FY 2019-20 to FY 2021-22 in accordance with the provisions of MYT Regulations,
2018.
8.2 Transmission Loss
8.2.1 AEGCL has projected the Transmission Loss for FY 2019-20 to FY 2021-22, as
detailed in the Table below:
Table 53: Transmission Losses Projected by AEGCL for FY 2019-20 to 2021-22
Sl. Particulars FY 2019-
20
FY 2020-
21
FY 2021-
22
1 Energy Injected (MU) 10772.58 11438.49 12158.25
2 Energy Sent Out to APDCL (MU) 10069.00 10695.00 11372.00
3 Energy Sent Out to OA Consumers (MU) 333.00 350.00 368.00
4 Total Energy Sent Out (MU) 10402.00 11045.00 11740.00
4 Transmission Loss (MU) 370.58 393.49 418.25
5 Transmission Loss (%) 3.44% 3.44% 3.44%
Commission’s Analysis
8.2.2 The Commission in the MYT Order dated March 31, 2017, had approved the
Transmission Loss trajectory after considering reduction of 0.05% each year. AEGCL
has planned several Capital Projects towards system strengthening and loss
reduction, etc., which have been approved by the Commission. Hence, the
Commission while approving the Transmission Loss trajectory for the Control Period
from FY 2019-20 to FY2021-22, has adopted the same principle of reduction of 0.05%
in each year, over the Transmission Loss level approved for FY 2018-19 in the Tariff
Order dated March 19, 2018.
8.2.3 Accordingly, the Commission has approved the loss trajectory below:
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Table 54: Transmission Losses Approved for FY 2019-20 to 2021-22
Sl. Particulars FY 19-20 FY 20-21 FY 21-22
1 Transmission Loss 3.39% 3.34% 3.29%
8.3 Transmission Availability
8.3.1 AEGCL has projected the Transmission Availability of 99.50% for the Control Period
from FY 2019-20 to FY 2021-22.
Commission’s Analysis
8.3.2 Regulation 65 of the MYT Regulations, 2018 specifies the Normative Transmission
Availability of 98% for full recovery of transmission charges and 98.5% for incentive
consideration. Also, the computation and payment of Transmission Charges has been
linked to monthly Transmission Availability computed as per Regulation 69 of the MYT
Regulations, 2018.
8.3.3 The Commission notes that AEGCL has projected the trajectory of Transmission
Availability higher than Normative Transmission Availability as specified in MYT
Regulations, 2018.The computation of incentive/disincentive on account of
Transmission Availability shall be undertaken at the time of truing up for each year of
the Control Period in line with the MYT Regulations, 2018.
8.4 Operation and Maintenance Expenses
8.4.1 AEGCL submitted that O&M expenses for FY 2019-20 to FY 2021-22 have been
computed on the basis of revised estimates for FY 2018-19 and consist of following
heads:
a) Employee expenses
b) R&M expenses
c) A&G expenses
The claim of AEGCL under various heads of O&M expenses are discussed below:
8.4.2 Inflation Indices
8.4.3 AEGCL submitted that the average increase in the WPI for the immediately preceding
three years gives the WPI for the Base year. Since the WPI data is currently available
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till FY 2017-18, the Inflation factor could be computed till FY 2018-19. Hence, the
resulting average WPI of 0.33%has been considered for projecting the O&M expenses
for the Control Period.
8.4.4 AEGCL submitted that the average increase in the CPI for the immediately preceding
three years gives the CPI for the base year. Since the CPI data is currently available
till FY 2017-18, the Inflation factor could be computed till FY 2018-19. Hence the
resulting average CPI of 4.28% has been considered for projecting the O&M expenses
for the Control Period.
Employee Expenses
8.4.5 AEGCL submitted that the base employee cost of FY 2018-19 has been computed
after considering the impact of ROP. AEGCL submitted that it has been facing acute
shortage of manpower in H.O. as well as field offices. AEGCL identified the Technical
Department and Finance & Accounts Department as having a shortage of manpower.
AEGCL submitted that the working strength at the beginning of FY 2018-19 was only
1649 employees as against total sanctioned strength of 3230 employees, i.e., around
50% employee strength. In order to mitigate the difficulties arising out of insufficient
number of employees, AEGCL has initiated the process of recruitment to fill the vacant
positions, and shall be incurring additional cost on account of the rapid recruitment
which has been initiated. AEGCL projected the phased recruitment of around two
hundred employees spread through the Control Period, resulting in an employee
strength of 1,855 employees at the end of FY 2021-22, which translates into an annual
Growth Factor ‘Gn’ of 2.99%. AEGCL has considered this Growth Factor to project the
employee expenses for the Control Period.
8.4.6 AEGCL has accordingly projected the normative employee expenses for the Control
Period as Rs. 181.18 crore, Rs. 194.58 crore, and Rs. 208.98 crore for FY 2019-20,
FY 2020-21, and FY 2021-22, respectively.
R&M Expenses
8.4.7 AEGCL submitted that R&M expenses are directly related to number of the substation
and lines, age of the assets, its wear and tear during the period.
8.4.8 AEGCL submitted that the approved and actual R&M expenses for FY 2017-18 are
Rs. 16.26 crore and Rs. 15.15 crore, respectively. However, several maintenance
works were not undertaken on account of shortage of funds. Impending Civil Works
constitute a major part of unfinished R&M tasks. AEGCL submitted that had the funds
been available without financial constraints, all the necessary R&M tasks would have
86
been accomplished at an additional expense of Rs. 4.35 crore. Hence, considering the
ground realities and operational issues faced by AEGCL pertaining to R&M of its
assets, AEGCL proposed a ‘k’ factor of 1.2 for the Control Period.
8.4.9 AEGCL has accordingly projected the normative R&M expenses for the Control Period
as Rs. 20.77 crore, Rs. 26.67 crore, and Rs. 34.86 crore for FY 2019-20, FY 2020-21,
and FY 2021-22, respectively.
A&G Expenses
8.4.10 AEGCL submitted that the upcoming Control Period shall witness additional A&G
expenses under new heads of expenses, viz., SBI CPPC Charges for handling the
Pension Fund, Pilot Project expenses for carrying out Energy Audit, and Consultancy
Charges for Tariff-Regulatory and other matters. AEGCL projected additional A&G
expenses on these heads as Rs. 1.97 crore, Rs. 1.52 crore, and Rs. 1.57 crore for FY
2019-20, FY 2020-21, and FY 2021-22, respectively. AEGCL added that, considering
the projected future expansion of the network, servicing new areas and offices to cater
to the new areas and Investment in up gradation of technology, various components
of A&G expenses such as insurance, technical fees, license and Registration fees,
vehicle expenses, electricity and water charges to office and various other incidental
and miscellaneous expenses shall increase accordingly.
8.4.11 AEGCL has accordingly projected the normative A&G expenses for the Control Period
as Rs. 10.90 crore, Rs. 10.94 crore, and Rs. 10.97 crore for FY 2019-20, FY 2020-21,
and FY 2021-22, respectively.
Expenses towards Training and Capacity Building
8.4.12 AECGL submitted that training of manpower is required in order to achieve operational
effectiveness along with accident free workplace, given the technological changes.
AEGCL proposes to conduct technology and safety training workshops at regular
intervals.
8.4.13 AEGCL estimated the cost of the Training Workshops as Rs. 2 crore, and requested
the Commission to allow the Training and Capacity Building expenses under a
separate head in the Tariff Order.
Commission’s Analysis
8.4.14 The Commission has computed the O&M Expenses for the Control Period on
normative basis as per Regulation 66.6 of MYT Regulations, 2018. Any variation
between normative O&M expenses and actual O&M Expenses shall be considered
87
under sharing of gains and loss on account of controllable items as per Regulation 10
of MYT Regulations, 2018 at the time of truing up for respective year.
8.4.15 For computation of employee expenses for Control Period, the Commission has
adopted the following approach:
a) The actual employee expenses for FY 2017-18 have been considered as base
expenses, after deducting the ROP arrears of previous years paid out in FY 2017-
18, and after factoring in the impact of ROP on base salary.
b) CPI inflation has been computed as average increase of CPI for the period from
FY 2016-17 to to FY 2018-19 (upto December, 2018),, which works out to 3.77%.
c) Considering the projected expansion of transmission network and projected
increase in number of employees over the Control Period, growth factor of 1% has
been considered.
8.4.16 The normative employee expenses approved for the Control Period are shown in the
following Table:
Table 55: Approved Employee Expenses for Control Period (Rs. Crore)
Particulars FY 2019-20 FY 2020-21 FY 2021-22
Actual Employee
Expenses for the
previous year
EMPn-1 155.48 162.96 170.81
Growth factor Gn 1.00% 1.00% 1.00%
CPI Inflation CPI 3.77% 3.77% 3.77%
Normative Employee
Expenses 162.96 170.81 179.02
8.4.17 For computation of R&M Expenses for the Control Period, the Commission has
considered the following approach:
a) WPI inflation has been computed as average increase of WPI for the period from
FY 2016-17 to FY 2018-19 (upto December, 2018), which works out to 3.00%
b) K-factor governs the relationship between R&M expenses and Gross Fixed Assets.
The Commission has analysed the relationship between approved R&M expenses
and Gross Fixed Assets for the period from FY 2016-17 to FY 2018-19. It is to be
noted that, K-factor cannot be computed based on anticipated expenditure, as
proposed by AEGCL. The K-factor for the Control Period has been considered as
average of K-factor computed for FY 2016-17 to FY 2018-19,as shown in the
following Table:
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Table 56: Computation of K-factor for Control Period (Rs. Crore)
Sr.
No.
Particular FY 2016-17 FY 2017-18 FY 2018-19
1 R&M Expenses 14.71 16.24 17.08
2 Opening GFA 1,544.59 1,628.68 1,681.83
3 Closing GFA 1,628.68 1,681.83 1,822.50
4 Average GFA 1,586.64 1,655.26 1,752.16
5 k-Factor 0.93% 0.98% 0.97%
6 K-Factor for
Control Period 0.96%
c) Since, K-factor has been computed on the basis of average GFA, for projection of
R&M expenses for the Control Period, average GFA for previous years has been
considered.
8.4.18 The normative R&M expenses approved for the Control Period are shown in the
following Table:
Table 57: Approved R&M Expenses for Control Period (Rs. Crore)
Particulars FY 2019-20 FY 2020-21 FY 2021-22
Opening GFA for previous year 1,676.82 1,817.49 1,957.49
Closing GFA for previous year 1,817.49 1,957.49 2,097.49
Average GFA for previous year GFAn-1 1,747.16 1,887.49 2,027.49
K Factor K 0.96% 0.96% 0.96%
WPI Inflation WPI 3.00% 3.00% 3.00%
R&M Expenses 17.29 18.68 20.07
8.4.19 For computation of A&G expenses for the Control Period, the Commission has adopted
the following approach:
a) The A&G expenses approved after APR for FY 2018-19have been considered as
base expenses.
b) WPI inflation has been computed as average increase of WPI for period from FY
2016-17 to FY 2018-19 (upto December, 2018), which works out to 3.00%.
8.4.20 The approved A&G expenses for the Control Period are shown in the following Table:
89
Table 58: Approved A&G Expenses for Control Period (Rs. Crore)
Particulars FY 2019-20 FY 2020-21 FY 2021-22
A&G Expenses for Previous Year A&Gn-1 9.08 9.35 9.63
WPI Inflation WPI 3.00% 3.00% 3.00%
Provision Provision 0.00% 0.00% 0.00%
A&G Expenses –Transmission 9.35 9.63 9.92
8.4.21 The SBI CPPC Charges for handling the Pension Fund, as proposed by AEGCL,
cannot be considered as part of A & G Expenses. The same should be charged to the
Pension Fund.
8.4.22 Additional expenses of Rs. 1 crore have been allowed over the Control Period for
training and Capacity Building, spread as Rs. 0.30 crore, Rs. 0.30 crore and Rs. 0.40
crore for FY 2019-20, FY 2020-21, and FY 2021-22, respectively. These additional
expenses have been allowed separately in the ARR, and have not been combined with
the A&G expenses. AEGCL is hereby directed for submission of the expenses
separately at the time of truing up.
8.5 Capital Expenditure and Capitalisation
8.5.1 The Capital Investment Plan projected by AEGCL has been elaborated in the previous
Chapter.
8.5.2 AEGCL submitted that the funding of Capital Expenditure is envisaged through Grants,
Equity, and Loans, as per funding pattern of the respective Schemes, as shown in the
following Table:
Table 59: Capital Expenditure and Capitalisation submitted by AEGCL (Rs. Crore)
Particulars FY 2019-20 FY 2020-21 FY 2021-22 Capital Expenditure 2474.98 1956.85 940.71
Capitalisation 844.73 521.07 1767.54
Funding of Capitalisation
Grant 664.64 347.67 1,215.60
Equity 54.03 52.02 165.58
Debt 126.06 121.38 386.36
Commission’s Analysis
8.5.3 The Commission has approved the Scheme-wise Capital Expenditure and
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Capitalisation as elaborated in Chapter 7 of this Order.
8.5.4 Accordingly, the Commission has considered average annual Capital Expenditure of
Rs. 175 crore and average annual Capitalisation of Rs. 140 crore, for the purpose of
determination of ARR and Transmission Tariff, as shown in the Table below:
Table 60: Capital Expenditure and capitalisation approved by the Commission for the
Control Period (Rs. Crore)
Particulars FY 2019-20 FY 2020-21 FY 2021-22
Capital Expenditure 175.00 175.00 175.00
Capitalisation 140.00 140.00 140.00
8.5.5 The Commission clarifies that the approach adopted by the Commission does not bar
AEGCL from implementing the schemes as approved in the Capital Investment Plan
for the Control Period from FY 2019-20 to FY 2021-22. In case AEGCL achieves higher
Capital Expenditure and Capitalisation, the same may be submitted at the time of truing
up for the respective year.
8.5.6 The Commission has considered the funding of capitalisation in the same ratio as
proposed by AEGCL, i.e., Grant funding has been considered as 79%, 67%, and 69%
of the assets added in FY 2019-20, FY 2020-21, and FY 2021-22, respectively. The
balance has been considered to be funded by loans, and no equity addition has been
considered.
8.5.7 The funding of capitalised works as approved by the Commission is shown in the
following Table:
Table 61: Funding of Capitalisation approved by the Commission for the Control Period
(Rs. Crore)
Particulars FY 2019-20 FY 2020-21 FY 2021-22
Grant/Consumer Contribution 110.15 93.41 96.28
Equity 0.00 0.00 0.00
Debt 29.85 46.59 43.72
Total Capitalisation 140.00 140.00 140.00
8.6 Depreciation
8.6.1 AEGCL submitted that depreciation has been computed as per MYT Regulations, 2018
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for the Control Period. Depreciation has been calculated taking into consideration the
opening balance of assets in the beginning of the year and the provisional
capitalization. The Closing Gross Block of Fixed Assets for FY 2018-19 has been
considered as the opening balance of assets for FY 2019-20. As specified in
Regulation 33 of MYT Regulations, 2018, depreciation is calculated as per SLM
considering depreciation on opening Fixed Asset to the extent of 90% of the Asset
Value. The Depreciation of assets created through Grant has been reduced before
arriving at Net depreciation.
8.6.2 AEGCL submitted that the GFA of SLDC has been segregated from AEGCL GFA and
is filed separately under SLDC’s Tariff Petition for the Control Period. AEGCL claimed
the depreciation of Rs. 43.34 Crore,Rs. 80.95 Crore, and Rs. 128.91 Crore for FY
2019-20,FY 2020-21,and FY 2021-22, respectively.
Commission’s Analysis
8.6.3 For computation of depreciation, the Commission has considered the closing GFA for
FY 2018-19 as approved in this Order as the Opening GFA for FY 2019-20. The
capitalisation approved for the respective years of the Control Period has been
considered as asset addition during the year. The Commission has considered the
scheduled depreciation rates as specified in MYT Regulations, 2018.
8.6.4 As per Regulation 32.1 of the MYT Regulations, 2018, the total depreciation during the
life of the asset shall not exceed 90% of the original cost of GFA. The Commission has
computed the depreciation separately for assets added under each asset head in each
year. The Commission has disallowed the depreciation on assets where depreciation
is in excess of 90% of the original cost of asset under different asset heads.
8.6.5 In view of the above, the Commission has approved depreciation for the period from
FY 2019-20 to FY 2021-22 as per MYT Regulations, 2018, as given in the Tables
below:
Table 62: Depreciation approved for FY 2019-20 (Rs. Crore)
Sl. Particulars Opening
GFA
Addition
during the
year
Rate of
depreciation
Depreciation
Approved
1 Land & Rights 37.69 - -
Land under lease 0.30 -
-
2 Building 37.80 1.34 3.34% 0.73
3 Hydraulic 2.64 - 5.28% -
4 Other Civil Works 81.85 1.64 3.34% 2.76
92
Sl. Particulars Opening
GFA
Addition
during the
year
Rate of
depreciation
Depreciation
Approved
5 Plant & Machinery 848.62 103.70 5.28% 43.80
6 Lines & Cable Network 796.29 33.00 5.28% 21.80
7 Vehicles 4.90 0.17 9.50% 0.08
8 Furniture& Fixtures 4.17 0.07 6.33% 0.16
9 Office Equipment 3.24 0.08 6.33% 0.17
10 Grand Total 1,817.49 140.00 69.50
11 Asset excluding Land 1,779.50 140.00 3.76% 12 Less: Depreciation for
Grants/ Consumer
Contribution 45.58
13 Net Depreciation 23.92
Table 63: Depreciation approved for FY 2020-21 (Rs. Crore)
Sl. Particulars Opening
GFA
Addition
during the
year
Rate of
depreciation
Depreciation
Approved
1 Land & Rights 37.69 - - Land under lease 0.30 - -
2 Building 39.14 2.17 3.34% 0.79
3 Hydraulic 2.64 - 5.28% -
4 Other Civil Works 83.49 13.13 3.34% 3.01
5 Plant & Machinery 952.31 65.73 5.28% 48.28
6 Lines & Cable Net work 829.29 50.39 5.28% 24.01
7 Vehicles 5.06 0.27 9.50% 0.10
8 Furniture& Fixtures 4.24 0.12 6.33% 0.16
9 Office Equipment 3.32 0.13 6.33% 0.43
10 Any other assets
8.06
11 Grand Total 1,957.49 140.00 76.77
12 Asset excluding Land 1,919.50 140.00 3.86%
13 Less: Depreciation for
Grants/Consumer
Contribution
50.73
14 Net Depreciation 26.04
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Table 64: Depreciation approved for FY 2021-22 (Rs. Crore)
Sl. Particulars Opening
GFA
Addition
during
the year
Rate of
depreciation
Depreciation
Approved
1 Land & Rights 37.69 - -
Land under lease 0.30 - -
2 Building 41.31 0.25 3.34% 0.83
3 Hydraulic 2.64 - 5.28% -
4 Other Civil Works 96.62 1.05 3.34% 3.24
5 Plant & Machinery 1,018.04 125.75 5.28% 53.33
6 Lines & Cable Net work 879.68 12.90 5.28% 25.68
7 Vehicles 5.33 - 9.50% 0.11
8 Furniture& Fixtures 4.36 0.05 6.33% 0.17
9 Office Equipment 3.45 - 6.33% 0.68
10 Any other assets 8.06 -
11 Grand Total 2,097.49 140.00 84.04
12 Asset excluding Land 2,059.50 140.00 3.95%
13 Less: Depreciation for
Grants/Consumer Contribution 55.63
14 Net Depreciation 28.41
8.7 Interest on Loan Capital
8.7.1 AEGCL has considered the closing net normative loan for FY 2018-19 as per its
submissions, as the opening net normative loan for FY 2019-20. AEGCL submitted
that the loan addition during FY 2019-20, FY 2020-21 and FY 2021-22 has been
considered as per the CAPEX funding plan. The normative repayment has been
considered equal to the depreciation. The weighted average interest rate on the actual
loan portfolio works out to be 9.90%, 9.91% and 9.94% for the respective years of the
Control Period.
8.7.2 Accordingly, AEGCL has projected the Interest and Finance Charges for FY 2019-20,
FY 2020-21 and FY 2021-22 as Rs. 33.48 crore, Rs. 39.67 crore, and Rs. 54.59 crore,
respectively.
Commission’s Analysis
8.7.3 The Commission has considered the opening net normative loan as on April 1, 2019
as Rs 57.36 Crore, based on the closing net normative loan of FY 2018-19 and after
segregating the loan for SLDC. The addition of loan has been considered equal to debt
94
portion of capitalized works as approved by the Commission in this Order. The loan
repayment has been considered equivalent to depreciation approved in this Order.
8.7.4 The weighted average rate of Interest of 9.87% applicable for FY 2018-19 has been
considered for computing the normative interest for each year of the Control Period.
The interest on loan capital as approved by the Commission for the Control Period is
shown in the following Table:
Table 65: Approved Interest on Loan for the Control Period (Rs. Crore)
Particulars FY 2019-20 FY 2020-21 FY 2021-22 Net Normative Opening Loan 57.36 63.28 83.84
Addition of normative loan during the year 29.85 46.59 43.72
Normative Repayment during the year 23.92 26.04 28.41
Net Normative Closing Loan 63.28 83.84 99.14
Interest Rate 9.87% 9.87% 9.87%
Interest Expenses 5.95 7.26 9.03
8.8 Return on Equity
8.8.1 AEGCL submitted that RoE has been computed at the rate of 15.50% as specified in
Regulation 33 of MYT Regulations, 2018, on the opening equity and 50% of equity
addition during the year. Accordingly, AEGCL has projected the RoE as Rs. 19.68
crore, Rs. 27.89 crore, and Rs. 44.76 crore for FY 2019-20, FY 2020-21 and FY 2021-
22, respectively.
Commission’s Analysis
8.8.2 The Commission has approved the RoE in accordance with Regulation 33 of the MYT
Regulations, 2018. As discussed earlier, the Commission has not considered any
addition of equity during the Control Period from FY 2019-20 to FY 2021-22. Therefore,
the approved RoE at 15.50% is shown in the Table below:
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Table 66: Return on Equity approved by the Commission (Rs. Crore)
8.9 Interest on Working Capital
8.9.1 AEGCL submitted that the normative interest on working capital (IoWC) has been
computed in accordance with the MYT Regulations, 2018.The rate of interest provided
on the working capital is the normative interest rate of 300 basis points above the
average State Bank of India MCLR (one-year tenor) prevalent during last available six
months. Accordingly, AEGCL has projected the IoWC as Rs. 15.40 crore, Rs. 17.45
crore, and Rs. 20.31 crore for FY 2019-20, FY 2020-21 and FY 2021-22, respectively.
Commission’s Analysis
8.9.2 The Commission has computed normative IoWC in accordance with the MYT
Regulations, 2018. The rate of Interest has been considered equal to State Bank of
India MCLR (One Year Tenor) prevalent during last 6 months as on 1st April of the
respective year plus 300 basis points i.e., 11.47%. IoWC approved by the Commission
for the Control Period is shown in the following Table:
Table 67: IoWC approved by the Commission for the Control Period (Rs. Crore)
Sr.
No
.
Particulars FY 2019-
20
FY 2020-
21
FY 2021-
22
1 O&M expenses for 1 month 15.83 16.62 17.45
2 Maintenance spares @ 15% of
O&M Expenses 28.49 29.91 31.41
3 Receivables for two months 60.14 63.50 67.15
4 Total Working Capital 104.45 110.03 116.02
5 Rate of Interest 11.47% 11.47% 11.47%
6 Interest on Working Capital 11.98 12.62 13.30
8.10 PGCIL Charges
8.10.1 AEGCL submitted that in compliance with the Commission’s directives in the Tariff
Sr. No. Particulars FY 2019-20 FY 2020-21 FY 2021-22
1 Opening Equity Capital 99.93 99.93 99.93
2 Equity addition during the year - - -
3 Closing Equity 99.93 99.93 99.93
5 Rate of Return on equity 15.50% 15.50% 15.50%
6 Return on Equity 15.49 15.49 15.49
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Order dated 19 March 2018, the transmission charges to PGCIL shall henceforth be
paid by APDCL.
Commission’s Analysis
8.10.2 The Commission has not considered PGCIL Charges as part of AEGCL’s ARR for this
Control Period, and the same has been considered in the ARR of APDCL.
8.11 Income Tax
8.11.1 AEGCL submitted that as per MYT Regulations, 2018, Income Tax shall be reimbursed
to the transmission licenses as per actual Income Tax paid, based on the documentary
evidence submitted at the time of truing up of each year.
Commission’s Analysis
8.11.2 The Commission has not considered any provision towards Income Tax. The actual
Income Tax paid shall be considered based on the documentary evidence submitted
at the time of truing up of each year of the Control Period, subject to prudence check.
8.12 Other Debits
8.12.1 AEGCL submitted that other costs and bad debts had not been considered in the
estimated ARR and it may claim the same at the time of true-up of the respective FY.
Commission’s Analysis
8.12.2 The Commission, at this stage, has not considered any other Debits. The Commission
may take an appropriate view on AEGCL’s claim, if any, at the time of truing up for
each year of the Control Period after prudence check.
8.13 BST for Pension Fund
8.13.1 AEGCL submitted that the special charges on account of Bulk Supply Tariff have been
computed considering the prevailing Bulk Supply Tariff of 20 paise per unit of energy.
Accordingly, the Special Charges for the Control Period are tabulated below:
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Table 68: Special charges - BST for Control Period as projected by AEGCL
Particulars FY 2019-
20 FY 2020-
21 FY 2021-
22
Special Charges on Bulk Supply Tariff 201.38 213.90 227.44
Commission’s Analysis
8.13.2 The Government of Assam has recently increased the Electricity Duty on sale of
electricity from 20 paise/kwh to 5% of the electricity charges, which goes as a
contribution to the Pension Fund of the Employees of the successor Companies of the
erstwhile ASEB. A provision in the State Budget for FY 2019-20 was also made, for a
lump sum grant of Rs. 500 Cr to the Pension Fund. The Commission have been
receiving objections from the consumers regarding charging BST of 20 paise/kwh for
the Pension Fund, on the ground that, contribution to the Pension Fund should be
made by the State Govt and the consumers should not be burdened with the same.
8.13.3 In the light of the above development, the Commission is of the view that it would be
fair to reduce the BST rate in a phased manner. Accordingly, for the Control Period of
FY 2019-20 to FY 2021-22, BST charge has been reduced from 20 paise/unit to 15
paise/unit.
8.13.4 Accordingly, the Commission approves BST for Pension Fund at 15 Paise per unit on
the energy transmitted to APDCL, as approved in MYT Order of APDCL, as shown in
the following Table:
Table 69: BST for Pension Fund as approved by the Commission (Rs. Crore)
Particulars FY 2019-20 FY 2020-21 FY 2021-22 Energy transmitted to APDCL (MU) 9,440.01 9,972.47 10,543.70
BST for Pension Fund at 15 paise
per unit 141.60 149.59 158.16
8.14 Non-Tariff Income
8.14.1 AEGCL has projected the Non-Tariff income for the Control Period as Rs. 25.31 crore,
Rs. 26.57 crore, and Rs. 27.89 crore for FY 2019-20, FY 2020-21 and FY 2021-22,
respectively, by considering a 5% escalation over estimated values for FY 2018-19.
AEGCL submitted that since, the transmission charges to PGCIL shall henceforth be
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paid by APDCL, no PGCIL rebate has been considered under Non-Tariff Income for
the upcoming Control Period.
Commission’s Analysis
8.14.2 The Commission approves the Non-Tariff Income of Rs. 28.01 Crore for FY 2019-20,
Rs. 29.41 Crore for FY 2020-21 and Rs. 30.88 Crore for FY2021-22 of the Control
Period, by considering a 5% escalation over each head of estimated Non-Tariff Income
for FY 2018-19. The actual Non-Tariff income shall be considered at the time of truing
up for each year of the Control Period, after prudence check.
8.15 Summary of ARR for Control Period from FY 2019-20 to FY 2021-22
8.15.1 The summary of ARR as submitted by AEGCL and as approved by the Commission
for the Control Period is given in the Table below:
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Table 70: ARR for Control Period from FY 2019-20 to FY 2021-22 as approved by the Commission (Rs. Crore)
Sr.
No. Particulars
FY 2019-20 FY 2020-21 FY 2021-22
Proposed
by AEGCL Approved
Proposed by
AEGCL Approved
Proposed
by AEGCL Approved
1 PGCIL Charges - - - - - -
2 O&M Expenses 214.79 189.91 232.16 199.42 254.81 209.42
2.1 Employee Cost 181.18 162.96 194.58 170.81 208.98 179.02
2.2 R&M Expenses 20.71 17.29 26.64 18.68 34.86 20.07
2.3 A&G Expenses 10.90 9.35 10.94 9.63 10.97 9.92
3 Training Expenses 2.00 0.30 - 0.30 - 0.40
4 Depreciation 43.34 23.92 80.95 26.04 128.91 28.41
5 Interest & Finance Charges 33.48 5.95 39.67 7.26 54.59 9.03
6 Interest on Working Capital 15.40 11.98 17.45 12.62 20.31 13.30
7 BST for Pension Trust Fund 201.38 141.60 213.90 149.59 227.44 158.16
8 Return on Equity 19.68 15.49 27.89 15.49 44.76 15.49
9 Income Tax - - - - - -
10 Sub Total 528.06 388.85 612.02 410.41 730.83 433.81
11 Less: Non-Tariff Income/ Other Income 25.31 28.01 26.57 29.41 27.89 30.88
12 Less: Expenses Capitalised - - - - - -
13 Aggregate Revenue Requirement 502.75 360.84 585.45 381.00 702.93 402.93
.
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9 ARR for SLDC for MYT Control Period from FY
2019-20 to FY 2021-22
9.1 Introduction
9.1.1 This Chapter deals with the determination of Aggregate Revenue Requirement for
SLDC for the MYT Control Period from FY 2019-20 to FY 2021-22 in accordance with
the provisions of MYT Regulations, 2018.
9.1.2 AEGCL submitted that the Commission vide Order dated 19 March 2018 had directed
AEGCL to file separate ARR Petition for SLDC from the next Control Period onwards.
Hence, in accordance with the aforesaid directive, a separate ARR Petition has been
filed for SLDC for the Control Period from FY 2019-20 to FY 2021-22.
9.1.3 AEGCL added that the annual accounts of SLDC are included in annual accounts of
AEGCL till FY 2017-18, hence, the projection for the MYT Control Period has been
carried out with the limited available data from audited accounts of AEGCL and certain
assumptions.
9.2 Multi Year Tariff Determination for FY 2019-20 to FY 2021-22
9.2.1 SLDC has projected the ARR for FY 2019-20 to FY 2021-22, in accordance with the
MYT Regulations, 2018, as shown in the Table below:
Table 71: Summary of ARR of SLDC for FY 2019-20 to FY 2021-22 as submitted by AEGCL
Particulars FY 2019-20 FY 2020-21 FY 2021-22
O&M Expenses 6.33 7.61 9.16
Employee Cost 4.64 5.92 7.55
Repair and Maintenance Expenses 0.48 0.48 0.49
Administrative and General Expenses 1.21 1.22 1.12
Training Expenses 0.25
Depreciation 0.03 0.12 0.16
Interest & Finance Charges 0.09 0.13 0.25
Interest on Working Capital 0.29 0.35 0.42
Return on Equity 0.01 0.05 0.14
Less: Non-Tariff Income 0.85 0.89 0.93
ARR of SLDC 6.15 7.37 9.20
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9.2.2 SLDC has projected each head of expenses in accordance with the MYT Regulations,
2018 and after adopting the same principles as adopted for AEGCL’s Transmission
Business, hence, the same have not been repeated in this Chapter. Only the issues
specific to SLDC have been elaborated in the following paragraphs along with the
Commission’s analysis of the same.
9.2.3 SLDC submitted that, at present, the employee’s strength is 21. As per the
Commission’s directions regarding segregation and strengthening of SLDC, SLDC
proposes to hire 26 new employees for technical, accounts and HR department during
the control period. Accordingly, SLDC has proposed Growth Factor ‘Gn’ of 22.31% for
projecting the Employee Expenses for the Control Period.
9.2.4 SLDC submitted the funding of proposed Capitalisation based on the normative debt
equity ratio of 70:30, as shown in the following Table:
Table 72: Capitalisation and Funding as submitted by SLDC (Rs. Crore)
Particulars FY 2019-20 FY 2020-21 FY 2021-22
Capitalisation 0.606 0.870 3.020
Funding of Capitalisation
Grant - - -
Equity 0.182 0.261 0.906
Debt 0.424 0.609 2.114
Commission’s Analysis
9.2.5 As regards the growth in the number of employees of SLDC, the Commission has
considered that annually, around 8 employees would be added from FY 2019-20 to FY
2021-22, thereby resulting in employee strength of 47 at the end of FY 2021-22. For
meeting the increased employee expenses on this account, the Commission has
allowed additional employee expense of Rs. 1.00 crore for each Year of the Control
Period, which also gets escalated by the CPI for FY 2020-21 and FY 2021-22, as it
becomes part of the base employee expenses for FY 2019-20. However, these
additions of Employees should be completed within the Control Period.
9.2.6 The funding of capitalisation has been considered based on the normative debt: equity
ratio of 70:30, as proposed by SLDC.
9.2.7 The Commission has approved the expenses based on the principles specified in MYT
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Regulations, 2018 and after adopting the same principles as adopted for AEGCL’s
Transmission Business. The summary of ARR as submitted by SLDC and as approved
by the Commission for the Control Period from FY 2019-20 to FY 2021-22 is given in
the Table below:
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Table 73: ARR of SLDC for FY 2019-20 to FY 2021-22 as approved by the Commission (Rs. Crore)
Sr.
No. Particulars
FY 2019-20 FY 2020-21 FY 2021-22
Proposed
by AEGCL Approved
Proposed by
AEGCL Approved
Proposed
by AEGCL Approved
1 O&M Expenses 6.33 4.36 7.61 5.28 9.16 6.51
2.1 Employee Cost 4.64 3.29 5.92 4.45 7.55 5.66
2.2 R&M Expenses 0.48 0.38 0.48 0.38 0.49 0.39
2.3 A&G Expenses 1.21 0.44 1.22 0.46 1.12 0.47
2.4 Training Expenses 0.25 0.25
3 Depreciation 0.03 0.07 0.12 0.13 0.16 0.22
4 Interest & Finance Charges 0.09 0.08 0.13 0.14 0.25 0.31
5 Interest on Working Capital 0.29 0.19 0.35 0.23 0.42 0.30
6 Return on Equity 0.01 - 0.05 - 0.14 -
7 Sub Total 7.00 4.70 8.26 5.79 10.13 7.34
8 Less: Non-Tariff Income/ Other Income 0.85 0.85 0.89 0.89 0.93 0.93
9 Aggregate Revenue Requirement 6.15 3.85 7.37 4.90 9.20 6.41
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10 Transmission Tariff for FY 2019-20
10.1 Cumulative Revenue Gap/(Surplus) and Net ARR for recovery
10.1.1 AEGCL has submitted the cumulative Revenue Gap/(Surplus) after Truing up of FY
2017-18 and APR of FY 2018-19 and based on the ARR of Control Period as shown
in the Table below:
Table 74: Cumulative Revenue Gap/(Surplus) (Rs. Crore)
Particulars Amount
Revenue Gap/(Surplus) on account of Interest & Finance Charges
for FY 2016-17 25.95
Revenue Gap/(Surplus) for FY 2017-18 (81.39)
Provisional Revenue Gap/(Surplus) for FY 2018-19 (11.02)
Carrying/(Holding) cost on Revenue Gap/(Surplus) for FY 2017-18 (9.93)
Carrying/(Holding) cost on Revenue Gap/(Surplus)for FY 2018-19 (0.67)
Total Gap / (Surplus) (77.07)
Commission’s Analysis
10.1.2 For computation of cumulative Revenue Gap/(Surplus), the Commission has
considered the Revenue Gap/(Surplus) after truing up of FY 2017-18 as approved in
this Order along with Carrying/(Holding)Cost. No Revenue Gap/(Surplus) has been
proposed to be recovered through tariff in FY 2019-20 arising out of APR of FY 2018-
19, in accordance with the MYT Regulations, 2018.
Table 75: Revenue Gap/(Surplus) for FY 2017-18approved for recovery/adjustment in
FY 2019-20 (Rs. Crore)
Sr. No.
Particulars MYT Order AEGCL Approved in this Order
1 Net ARR 1,197.32 1,113.59 1,097.36
2 Revenue from Transmission Charges 1,197.32 1,194.99 1,194.99
3 Gap/(surplus) - (81.40) (97.63)
4 Carrying/(Holding) cost (9.93) (23.66)
10.1.3 The Commission has computed the carrying/ (Holding) cost as shown in the following
Table:
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Table 76: Carrying/ (Holding) Cost for Revenue Gap/(Surplus) for FY 2017-18 approved
by the Commission (Rs. Crore)
Sr. No. Particulars FY 2017-18 FY 2018-19 FY 2019-20
1 Opening Balance - (97.63) (97.63)
2 Recovery /(Addition) during year 97.63 - (97.63)
3 Closing balance (97.63) (97.63) -
4 Rate of Interest (%) 12.60% 12.20% 11.47%
5 Carrying /(holding) Cost (6.15) (11.91) (5.60)
Total Holding Cost (23.66)
10.1.4 The Commission has considered the recovery of total Holding cost, i.e., Rs. 23.66 crore
on Revenue Surplus for FY 2017-18. The total Surplus including Holding cost is
calculated as Rs 121.29 Crore.
10.1.5 The Commission approves the cumulative Revenue Surplus of AEGCL as Rs 121.29
Crore. This Surplus is to be refunded to APDCL in twelve monthly equal instalments
of Rs 10.107 Crore in FY 2019-20 as adjustment to the monthly bills.
10.2 Transmission tariff for FY 2019-20
10.2.1 AEGCL has proposed the Transmission Tariff for the Control Period based on the
cumulative Revenue Gap/(Surplus) after Truing up of FY 2017-18 and APR of FY
2018-19 and based on the ARR of the Control Period, as shown in the Table below:
Table 77: Transmission Tariff Proposed by AEGCL (Rs. Crore)
Particulars FY 19-20 FY 20-21 FY 21-22
Stand-alone ARR 502.75 585.45 702.93
Previous Revenue Gap/(Surplus) with
Carrying/(Holding) cost (77.07)
Net Annual Revenue Requirement 425.68 585.45 702.93
Transmission Charge (Rs. / kWh) 0.42 0.55 0.62
Commission’s Analysis
10.2.2 In accordance with MYT Regulations, 2018 the Commission has determined the
Annual Transmission Charges and Transmission System Access Charges for FY
2019-20. The Annual Transmission Charges payable by APDCL and Transmission
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system access charges payable by other users of AEGCL transmission system are
arrived at based on Net ARR of AEGCL and the energy handled by the transmission
system.
Annual Transmission Charges for APDCL
10.2.3 The Annual Transmission Charges for FY 2019-20 shall be equal to Net ARR
approved for recovery for FY 2019-20, i.e., Rs. 360.84 Crore.
10.2.4 The Commission has determined the Annual Transmission Charges in terms of
Rs./kW/ month and per unit charges. The Commission has considered the maximum
Contracted capacity of 2110 MW as submitted by AEGCL and estimated energy
supplied to APDCL and Open Access consumers as 9,773 MU as approved in Tariff
Order of APDCL for FY 2019-20.
10.2.5 The Annual Transmission Charges shall be recovered on monthly basis as
transmission charge from the users who shall share the Transmission Charge in
proportion of the allotted transmission capacity.
10.2.6 AEGCL shall raise the bill for the transmission charge (inclusive of incentive) for a
month based on its estimate of Transmission System Availability Factor for the month
computed as per MYT Regulations, 2018. The adjustments, if any, shall be made on
the basis of the Transmission System Availability Factor to be certified by the SLDC
within 30 days from the last day of the relevant month.
10.2.7 The approved Transmission System Access Charges works out to Rs. 0.37/kWh for
FY 2019-20, as shown in the Table below:
Table 78: Transmission Access Charges approved by the Commission for FY 2019-20
Sr. No. Particulars FY 2019-20
1 Net ARR for Transmission (Rs Crore) 360.84
2 Energy transmitted to APDCL (MU) 9,773.01
3 Transmission Access Charges (Rs./kWh) 0.37
4 Transmission Charges for LTOA/ MTOA (Rs./MW/day) 4,685.34
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For short-term Open Access customers, the Transmission Charges shall be:
Rs. 0.37/kWh.
Note:
1) The Commission has considered Annual Maximum Peak for FY 2019-20 as 2110
MW.
2) Any recovery on account of short-term open access charges shall be considered as
Non-Tariff Income.
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11 Annual SLDC Charges for FY 2019-20
11.1.1 SLDC Charges approved for FY 2019-20 are Rs. 3.85 Crore, which are allocated to
APDCL as single user.
11.1.2 However, the SLDC charges to be charged for any other Long-term/Medium-term user
are as given below:
Sr. No. Particulars UoM Amount
1 Net ARR – SLDC Rs. Crore 3.85
2 Maximum Contracted Capacity MW 2,110.00
3 SLDC Charges for LTOA/MTOA
Consumers
Rs. ./MW/day 49.99
Approved SLDC charges to be recovered from APDCL for 2019-20 is Rs. 3.85
Crore.
The approved SLDC charges for Long-term/Medium-term Users of Transmission
System for FY 2019-20 are Rs. 49.99 per MW per day.
11.1.3 The annual SLDC charges as determined by the Commission shall be recovered from
APDCL. The SLDC shall furnish necessary monthly bills at the rate of one twelfth of
the annual charges as approved by the Commission, to APDCL for each billing month
within seven days after the last day of the preceding month. APDCL shall make
payment to the SLDC, within one month of the date of receipt of the bill.
11.1.4 The Short-term open access customers using the intra-State transmission system shall
pay only such scheduling charges to the SLDC as approved by the Commission in
accordance with AERC (Terms and Conditions for Open Access) Regulations 2018
11.2 Applicability of Tariff
11.2.1 The approved Transmission tariff and SLDC Charges for FY 2019-20 shall be effective
from April 1, 2019 and shall continue until replaced/modified by Order of the
Commission.
Sd/- Sd/-
(D. Chakravarty)
Member, AERC
(S. C. Das)
Chairperson, AERC
109
12 Directives
The Commission has issued certain directives to AEGCL in the past Orders, with an objective
of attaining operational efficiency and streamlining the flow of information, which would be
beneficial to the sector and the Petitioner, both in the short-term and long-term.
As regards the directives issued by the Commission in the Tariff Order dated March 19, 2018,
AEGCL has submitted the report to the Commission on compliance. The Commission has
reviewed the compliance of directives submitted by AEGCL, and the status is as follows:
Status of compliance of directives in the Tariff Order dated March 19, 2018.
Directive 1: Funding from the Government of Assam for employer’s contribution to
Terminal Liabilities based on Actuarial valuation.
AEGCL is directed to expedite the funding from Government of Assam for employer’s
contribution to Terminal Liabilities based on actuarial valuation done as on September 30,
2012.
Status:
AEGCL is pursuing the matter with Government of Assam .
Directive 2: Segregation of SLDC from AEGCL.
The Commission directs AEGCL to complete the process of segregation of accounts of SLDC
from AEGCL, in order to file separate Aggregate Revenue Requirement Petition for the next
Control Period. AEGCL should submit present status and future plan of action along with
timelines.
Status:
AEGCL has submitted separate MYT Petition for SLDC for FY 2019-20 to FY 2021-22. It was
informed by AEGCL that regarding segregation of SLDC, the process for studying the All India
scenario has been initiated. The functional processes and Organogram of SLDC is under
review by AEGCL.
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Directive 3: Approval for deviation in Capital Expenditure scheme approved in Business
Plan Order dated September 1, 2016.
The Commission directs AEGCL to take prior approval of the Commission in case of any
addition and/or deletion of schemes or any change in funding pattern of schemes approved in
Business Plan Order dated September 1, 2016. AEGCL shall also take prior approval of the
Commission in case of any emergency works, apart from the works approved in Business
Plan Order dated September 1, 2016, to be carried out during the Control Period from FY
2016-17 to FY 2018-19.
Status: Complied with.
Directive 4: Change in beneficiary of PGCIL
The Commission directs AEGCL and APDCL to work out the modalities to make APDCL rather
than AEGCL the beneficiary of PGCIL, before the commencement of the next MYT Control
Period (from FY 2019-20 onwards), so that the PGCIL bills are raised to APDCL directly.
AEGCL should exclude the PGCIL Charges in their Tariff Petition with effect from FY 2019-
20.
Status: Complied with.
Directive 5: Energy Audit and Implementation of SAMAST
The Commission directs AEGCL to carry out the Energy Audit for FY 2018-19 and submit the
report based on the metered energy at different interconnection points, including the status of
metering, functional meters, etc. This Report, with details of Transmission Losses, should be
submitted along with the next Tariff Petition. AEGCL is directed to implement SAMAST at the
earliest.
Status:
Report on Energy Audit for FY 2018-19 was not submitted. It was informed by AEGCL that
the SAMAST scheme is proposed to be implemented comprehensively in-coordination with
NERLDC. The necessary hardware and software are expected to be procured through
tendering process; the specification for which are under preparation by NERLDC. AEGCL’s
board has already approved the required amount towards this.
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Directive 6: Claim of Depreciation
The Commission directs AEGCL to submit its claim of Depreciation in the future Petitions in
line with the principles already settled by Hon’ble APTEL and in line with the provisions of MYT
Regulations, 2015.
Status: Complied with.
Directive 7: Revision of Pay
The Commission directs AEGCL to submit actual impact on account of Revision of Pay,
including detailed calculation and justification along with documentary evidences based on
Audited Accounts for FY 2017-18 and revised projections for FY 2018-19. AEGCL should
maintain details of expenses incurred on ROP in FY 2017-18 and FY 2018-19 and also for the
arrears paid separately.
Status: Complied with.
Directive 8: Compliance of Audit Observations
The Commission noted that Statutory Auditors and CAG have made several comments on the
Audited Accounts. AEGCL is directed to take corrective actions on the same expeditiously.
Status: Complied with.
New Directives:
The Commission hereby issues the following directives to AEGCL as under:
Directive 1 - Funding from Government of Assam for employer’s contribution to
Terminal Liabilities based on Actuarial valuation
AEGCL is directed to pursue the funding from Government of Assam for employer’s
contribution to Terminal Liabilities based on actuarial valuation done as on September 30,
2012.
112
Directive 2 – Energy Audit and Implementation of SAMAST
The Commission directs AEGCL to carry out the Energy Audit during FY 2019-20 and submit
the report based on the metered energy at different interconnection points, including the status
of metering, functional meters, etc. This Report, with details of Transmission Losses, should
be submitted along with the next Tariff Petition. AEGCL is directed to earnestly pursue the
implementation of SAMAST.
Directive 3 - Employee’s Provident Fund
The Commission directs AEGCL to complete the formalities of forming the Trust for
Employee’s Provident Fund as early as possible.
Directive 4 – Submission of Updated Fixed Assets Register
The Fixed Asset Register should be prepared and updated every year by AEGCL, duly
certified by Chartered Accountant. AEGCL is directed to maintain Fixed Asset Register at their
end and submit to the Commission as and when asked for during tariff proceedings.
Directive 5 – Capitalisation of Completed Projects
It is observed by the Commission that AEGCL is not capitalizing the expenses on account of
new projects even after many years of completion. AEGCL is directed to take measures for
capitalisation of the expenses soon after projects are completed.
Directive 6 – Ongoing projects
It is observed that, there are number of ongoing Projects, which are continuing for more than
four to five years. The Commission directs AEGCL to complete the Ongoing Projects as per
schedule. Efforts and funds should be channelized towards completion of the ongoing projects
on priority.
Directive 7 - Segregation & Strengthening of SLDC
The Commission directs AEGCL to expedite the process of Segregation & Strengthening of
SLDC. The new recruitments planned for the MYT period should be carried out as per plan.
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The Commission further directs that, AEGCL should maintain separate accounts of the
expenses/income pertaining to SLDC.
Directive 8 – Capacity Building
The Commission approved Rs 1 Cr for training and capacity building of employees in AEGCL
for the MYT control period. The Commission directs APGCL to submit the detailed expenditure
on account of capacity building, separately to the Commission, at the time of true up.
Further, AEGCL is directed to submit the status of compliance of above Directives to
the Commission at the end of each quarter. The Commission will review the status in
the month following the end of the quarter.
Directive 9 – Maintenance of Project-wise Database
AEGCL is directed to maintain database on the individual Projects under each Scheme
with the following details and submit the following details for all ongoing projects at
the time of true-up and Tariff for ensuing year. Further, for all Projects that have not
commenced by March 31, 2019, AEGCL shall obtain the Commission’s prior approval
based on the necessary details as identified below, even if in-principle approval has
been received:
a) Details/Scope of Project including activities, area covered, etc.;
b) Start date of Project;
c) Scheduled completion date of Project;
d) Funding Plan;
e) Cost-Benefit-Analysis of the Project
f) Present Status of Project, indicating physical progress in percentage
terms and in monetary terms;
g) Status of Capitalisation as per Field Reports and as per Accounts;
h) Whether the intended benefits of the Project have been achieved, etc.
Sd/- Sd/-
(D. Chakravarty)
Member, AERC
(S. C. Das)
Chairperson, AERC
114
Annexure-1
24th Meeting of the State Advisory Committee
VENUE : ASSAM ADMINISTRATIVE STAFF COLLEGE, GUWAHATI – 22.
DAY / DATE : TUESDAY, 5th February, 2019.
LIST OF MEMBERS / SPECIAL INVITEES: AT ANNEXURE-I (ENCLOSED)
The 24th Meeting of State Advisory Committee (SAC) was chaired by the Hon’ble
Chairperson, AERC, Shri S.C. Das IAS, (Retd.). At the onset, the Chairperson welcomed all
members and invitees to the meeting. He briefed the participants that the meeting was
convened, primarily, to discuss the Multi Year Tariff (MYT) Petitions for FY 2019-20 to
FY2021-22, which were filed by the State Power Utilities in December 2018. The
Chairperson informed that the utilities would make short PowerPoint presentations on the
important features of their respective petitions during the meeting. He further informed the
participants that a Public Hearing is also scheduled to be held on 12th February 2019 on
these petitions.
The Chairperson stated that as stipulated by Section 87 of the Electricity Act 2003, the
Commission has made it a point to approach the SAC for advice in all important matters of
policy, including Regulations and Tariff making. He requested the members to offer their
valuable advice on the petitions and in particular, on the following aspects:
a) The Discom has claimed increase in fixed charges stating that these charges
accounted for only 14% of the electricity tariff as on date, while fixed cost
constituted 60% of the total cost. The Commission increased fixed charges last
year by Rs 5 and Rs 10 across different categories of consumers.
b) The High Tension (HT) consumers have been claiming that cross subsidy
surcharge be reduced further and tariff be based on voltage wise cost of supply.
c) APDCL have signed the UDAY scheme and as per the MoU, the Company has
to restrict the distribution loss to 15% or below in 2019-20. The distribution loss
achieved by APDCL in FY 2018-19 is 17.64 %.Whether the Distribution loss
115
trajectory for the MYT period is to be determined keeping in view the MOU under
the UDAY scheme.
The Chairperson observed that the State Power Companies have been making huge capital
investments and most of these are funded under different schemes of the State & Central
Governments and loans from ADB and the World Bank. With capitalization of these projects,
electricity tariff is likely to be affected over the next couple of years. The Chairperson further
observed that there is a possibility of decrease in POC charges with increase in State
generation in the coming years and concern displayed by the Central Government regarding
high POC charges for few states and constitution of a Committee to study the matter afresh.
The Welcome address was followed by an introductory session among the members and
invitees. Thereafter, the agenda items were taken up for discussion in seriatim.
The important points raised by the Hon’ble Members during the course of discussions are
briefly recorded below.
Agenda: Confirm the Minutes of the 23rd meeting of SAC held on 15.06.2018
The Minutes of the 23rd Meeting of the Committee were circulated among the Members and
Special Invitees. The following comments were received on the above:
a) Shri A.K. Baruah, Adviser AASIA brought to the notice of the Commission that point
No.VI of Agenda No. 5 regarding the status of reconstitution of the Consumer Grievance
Redressal Forums was raised by him and not by the member mentioned in the minutes.
b) Shri Baruah stated that one of his observations regarding non-payment of load security
interest to LT consumers by APDCL was also not recorded in the minutes.
The Chairperson, AERC directed that necessary modifications be made to the minutes.
It is regretted that there was an inadvertent mistake in the name of the member. As directed
by the Commission, rectification has been made and point No.VI of Agenda No. 5 of the
minutes of the 23rd meeting of SAC held on 15.06.2018 shall henceforth be read as under:
“Shri A. K. Baruah, Adviser, AASSIA enquired regarding the status of the re-
constituted Consumer Grievance Redressal Forums. Chairperson AERC remarked
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that the Commission had written to the Discom to reconstitute 3 CGRFs in Jorhat,
Guwahati and Silchar as per the AERC Regulations and the process is underway.”
Chairperson AERC remarked that at present there are eight (8) CGRFs across the State
and the Commission has directed only three to be reconstituted with independent members
according to the AERC Regulations, 2016. This was because the total number of cases
recorded in the 8 CGRFs annually was not more than 20-25. He observed that most of the
grievances, more than 95%, were sorted out at the sub-divisional level. The Chairperson
further observed that APDCL should improve record keeping of the grievances attended at
sub-divisional and divisional levels.
Regarding the point of non-payment of load security interest to LT consumers, an addition
has been made to the minutes in Agenda No 5 as Point No. viii as under:
“Shri A.K. Baruah, Adviser AASSIA stated that although, APDCL is paying load
security interests to HT consumers, no payment is being made to the LT consumers.
He observed that this is a contravention to the provisions of the Electricity Act 2003
as the Act advocates interest payment to all consumers irrespective of the category
to which the consumers belong”.
The Commission directed APDCL to devise a means to pay interest on load security to the
LT consumers as well, as has been specified in the AERC Regulations & the Electricity Act,
and furnish an action taken report in the next SAC meeting.
Shri Champak Baruah, Member stated that he mentioned about the introduction of merit
cum seniority in promotion of Engineers of the three Companies but there are no records
of the same in the minutes.
The Chairperson clarified that as the matter relates to internal administration of the utilities
over which the Commission has no jurisdiction, it was not recorded.
Agenda: Action Taken on the minutes of the 23rd Meeting of SAC.
A power-point presentation was made by Assistant Director (Engineering) AERC, Shri J.
Bezbaruah on the salient features of action taken reports submitted by the power utilities.
Hard copies of the action taken reports were also circulated among the members of SAC.
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The Chairperson AERC asked the respective utilities to respond to any query from the SAC
Members. The important points of discussion are noted below:
i. Shri Subodh Sharma, President, Bidyut Grahak Manch stated that solid steps need
to be taken by the State Generating Sector to improve own generation capacity. He
observed that more State generation would help reduce the POC charges. He further
observed that performance of the state generation sector has a direct bearing on the
health of the State Transmission and Distribution utilities.
ii. Shri Dilip Kumar Sarma, Sr. Consultant, NETC stressed that all efforts should be
made to establish large sized generation plant inside the State of Assam either in
State or Central sector which will contribute towards moderating the existing POC
charges and in turn the domestic tariff.
iii. Regarding action taken by the Generation Company following decision of
construction of the National Gas Grid in the State, MD APGCL, Ms Kalyani Baruah
informed that APGCL has submitted a proposal to both MOPNG and GAIL for 9.75
MMSCMD of gas to set up power plants at various locations of Assam. Out of the
9.75 MMSCMD of gas, 6.60 MMSCMD is for the proposed 250 MW Chandrapur
Thermal Power Project and 1450 MW (2X725 MW) Thermal Power Project at Lower
Assam. The balance 3.15 MMSCMD gas is proposed to be utilized by the 725 MW
Amguri Thermal Power Project and 100 MW Ph-II Namrup Replacement Power
Project. MD, APGCL further informed that the price of gas available would be high
and APDCL is considering appointing consultants to conduct a feasibility study for
the proposed projects.
Chairperson AERC observed that APGCL should accept the gas available even if
price may be high, keeping in mind the future energy security of the State.
Shri V.K. Pipersenia, IAS (Retd), Chairman APDCL/AEGCL /APGCL informed that
they would soon initiate the process to appoint consultants to conduct a feasibility
study regarding the viability of the proposed gas projects vis-à-vis the cost of gas
available.
Shri D. Chakravarty, Member AERC, suggested that gas available should be a
mixture of both domestic and RLNG to reduce cost. MD, APGCL informed that
MOPNG has given assurance that the gas made available would be a mixture of
both domestic and RLNG and likely to be priced between $8- $12 per MMBTU.
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Shri Subodh Sharma suggested that since the National Gas Grid is likely to be
completed by 2020, therefore, the viability study needs to be completed at an early
date so that these projects come into existence before gas becomes available. He
informed the house that M/s GAIL had proposed uniform pricing of gas throughout
the country; however, the outcome of the proposal is unknown.
Shri Dilip Kumar Sarma stressed that APGCL through the Govt. of Assam should
vigorously pursue the proposal of M/s GAIL to the Ministry of Petroleum for uniform
pricing of gas through out the country irrespective of distance or direction. At the
same time, commitment from GAIL should also be obtained for minimum quantum
of gas required for economic operation of gas based plants to be established by
APGCL
Shri Dilip Kumar Sarma also observed that, given the present energy scenario, the
gas that would be available in the country for the next 50 years would meet only 15-
20% of the total requirement. Therefore, gas that would be supplied to Assam would
be imported gas and likely to be priced at $8-$9 per MMBTU.
iv. Shri K. Medhi, Secretary, NESSIA opined that there have been discussions
regarding setting up of power projects in Chandrapur since a long time, however,
nothing concrete has been achieved so far.
MD, APGCL replied that different kinds of projects were proposed in the past. She
stated that as suggested by Advisory Committee Members, a pumped storage
project was proposed to be set up at Chandrapur. It was informed that although some
investors had shown interest in the project initially, they failed to bid when tenders
were floated for the same, even after repeated extensions.
v. Shri A.K Baruah, Adviser, AASSIA suggested that APGCL should ensure adherence
to the timelines for completing their projects.
vi. Shri Subodh Sharma enquired regarding the new timelines for completion of the
NRPP project.
MD, APGCL informed that gas turbine (Open Cycle) project of NRPP is likely to be
commissioned in April, 2019 and the combined cycle project by December, 2019.
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vii. He further enquired as to why same generation output was shown throughout the
MYT period for NRPP. It was informed that APDCL has committed gas of 0.66
mmscmd from M/s GAIL of which 0.49 will be utilized in NRPP and with the remaining
gas, APGCL proposes to run few units of NTPS.
Shri Sharma observed that APGCL should make efforts to actually achieve the
proposed generation or else power procurement planning of APDCL gets affected
and the consumers may end up paying higher electricity price. He suggested that
the quantum of generation shown by APDCL and APGCL should match.
viii. Shri Champak Baruah enquired as to the status of the 70 MW Amguri Solar Power
Project. He emphasized the fact that while the last date for bidding of the project was
shown as 29.05.2019 in the last meeting, now the same is shown as 06.02.2019.
It was informed by the MD, APGCL that as suggested by SAC Members in the last
meeting, APGCL decided to implement the project on its own through EPC
contractors as project implementation through SECI was getting delayed. Therefore
new tenders were floated and it is expected to receive a number of bids by
06.02.2019.
It was emphasized from the Chair that APGCL should take steps for timely
completion of their projects such as NRPP, 120 MW Lower Kopili Hydel project, 24
MW Borpani Middle-II SHEP , etc
ix. Shri K. Medhi, General Secretary, NESSIA suggested that since APGCL has not
succeeded in adding sizeable new generation capacity, perhaps, APGCL may not
undertake any new project and instead, APDCL may be asked to procure power from
outside sources through different modes.
Chairperson, AERC agreed that APGCL had not achieved much success with new
projects in recent years except for 70 MW Lakwa Replacement Power Project
(LRPP), which was commissioned in time, and reiterated that the Company must
make ardent efforts to increase generation. He observed that the power generated
by APGCL is one of the cheapest powers available to the Discom. The Chairperson
further observed that emphasis must also be laid for fast completion of the Central
Sector Generation projects in Assam as the State receives 50% allocated power
from these projects.
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x. Regarding (2x800) MW Coal based Margherita Project, it was informed by MD,
APGCL that although the matter has been pursued with the Central Government
several times, no progress has been made in getting coal linkage for the project, so
far.
xi. There was a suggestion in the last meeting that newly recruited engineers of the
State distribution company may be trained on the technical aspects of electricity by
their deputation to generation/ transmission Company and similar measure may be
adopted for engineers of the generation / transmission sector so that these new
recruits get a good idea of the overall power sector. Shri V.K. Pipersenia, Chairman,
APGCL/AEGCL/APDCL commented that although it’s a good suggestion, the three
power Companies must devise their own HR policies. Shri Pipersenia informed that
at present, the Discom has a shortage of manpower and therefore, they are not in a
position to depute any Engineer to other utilities. The three companies have to
together decide on the matter.
Regarding the Development of 100 MW (25x4) Solar Power Plant within the State by
APDCL it was informed by Shri R. Agarwal, IAS, MD, APDCL that Azure Power India
Pvt. Ltd, New Delhi and Maheshwari Mining and Energy Pvt. Ltd, Telengana were
the successful bidders for 90 MW and 10 MW respectively. It was informed that the
timeline for implementation of the projects will be 18 months from the date of signing
the PPA. It was further informed that the bidders have identified the land for the
projects. The land in Udalguri area which was identified for one project has already
been transferred to the developer by the BTC administration while land acquisition is
under process for the rest of the projects.
Shri Subodh Sharma suggested that as agricultural land cannot be used for power
projects, the low lying lands of Brahmaputra river valley may be used for the purpose.
MD, APDCL informed that the land identified for the projects were lying vacant and
as such, there was some relaxation in norms and conversion of the land allowed for
the purpose of setting solar plants.
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xii. It was further informed by MD, APDCL that as suggested in the last meeting, APDCL
is carrying out energy audit of the 33/11 KV Jalukbari sub-station under PAT scheme.
Based on its output, it was informed that, similar audit may also be carried out in near
future for other sub-stations.
Chairperson AERC stated that as was informed in the last meeting, energy audit
study has been taken up by the Commission in three circles of APDCL namely
Guwahati Circle II, Jorhat and Cachar. Two Consultants were engaged through open
bidding but the work was delayed due to absence of transformer meters and 33 KV
& 11 KV line meters. He informed that meetings with concerned APDCL officers was
held from time to time and metering works are likely to be completed shortly. The
audit works will start immediately when the necessary infrastructure is in place.
Shri Subodh Sharma observed that the meters installed should have provisions for
IT connectivity in future.
MD, APDCL responded positively stating that the meters installed have the provision
for IT connectivity.
xiii. On safety related aspects, MD, APDCL informed that the Company have taken a
slew of measures to ensure safety of the consumers. APDCL have started replacing
the bare conductors for LT consumers with AB conductors, all transformers under
Saubhagya scheme are fenced and whenever cases of unfenced transformers are
reported, the Company immediately takes necessary action for fencing.
Shri Subodh Sharma suggested that many electrical accidents can be avoided if
emphasis is laid on proper earthing of the conductors.
MD, APDCL agreed to the suggestion and assured that action would be taken in this
regard. He requested the members to offer suggestions to APDCL regarding these
issues so that appropriate action can be initiated. He stated that there is shortage of
manpower to maintain the lines and recently a number of recruitments have taken
place in this regard which is expected to help the Company considerably.
Shri Champak Baruah commented that accidents also take place due to non
adherence to safety procedures by the linemen and officers of APDCL. Instances
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have come to his notice where linemen are taking shutdown instead of JEs, which is
not as per safety protocol. He observed that prior information of shutdown to the local
people while working on the electric lines /poles/ transformers is essential.
Chairperson AERC observed that APDCL must ensure that the safety protocols are
being followed and continue with their safety initiatives for the consumers.
xiv. Shri Saurav Agarwal, FINER informed that as requested in the last meeting, APDCL
circulated an advisory to the field offices regarding the new provision that the
requirement for declaring minimum 65% of the contracted demand no longer exist.
However, APDCL is not allowing a consumer to reduce the contract demand after
the month of September.
It was clarified by APDCL that it is sticking to the month of September as tariff
petitions, showing the load, is to be submitted by the month of November each year.
Chairperson AERC informed that as per the Supply Code Regulations, a consumer
can reduce the contract demand only once in a year, but as this was the first year of
the new Supply Code Regulations, he asked APDCL to look into the matter to
consider some relaxation, if feasible.
Agenda: Presentation on MYT Petitions for FY 2019-20 to FY 2021-22 by AEGCL
There was a brief power point presentation on the MYT petitions for FY 2019-20 to FY
2021-22 along with true up for FY 2017-18 and Annual Performance Review for FY 2018-
19. The presentation of AEGCL is enclosed as Annexure I. The following discussions took
place during the course of the presentation.
i. It was informed that from FY 2019-20, the transmission charges on account of
PGCIL shall be reflected in the tariff of APDCL.
ii. Shri Subodh Sharma commented that APDCL must correctly ascertain the PGCIL
charges and may seek help of AEGCL in this regard.
Chairperson AERC observed that PGCIL charges are basically the POC charges
and the actual amount can be ascertained through SLDC. He opined that APDCL
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shall acquire the expertise in calculating these charges over a period of time and
until then, may seek assistance from AEGCL.
iii. Shri Subodh Sharma pointed out that while the cost of AEGCL should have been
around 30-40 paise/unit for the MYT period of FY 2019-20 to FY 20121-22, AEGCL
was asking a tariff of 51- 62 paise/unit.
MD, AEGCL explained that the tariff included the BST charges of 20 paise per unit.
.
iv. Shri Subodh Sharma stated that Generators like Kathalguri Power Station, being a
central sector generator, despite having the AEGCL network at their bays, have to
evacuate their power through PGCIL network. Therefore, the consumers of Assam
have to bear high POC charges. These issues need to be taken up by the Assam
Government with the Central Government and Shri Sharma requested AERC to
bring the matter to the notice of the State Government.
Chairperson AERC observed that many States are facing similar issues and these
matters are being examined in the Central Government. However, he noted the
suggestion of Shri Sharma.
v. Shri Subodh Sharma opined that AEGCL is the best performing company among
the three power utilities of the State and it is important that policy decisions should
not cause any harm to the Company.
vi. Shri Sharma again pointed out the issue regarding Tariff Based Competitive
Bidding (TBCB) which has been made compulsory for setting up new intrastate
transmission projects as per the Tariff Policy, 2016. He expressed concern that the
State Transmission Company may suffer if TBCB is accepted.
Chairperson, AERC stated that it is a policy decision of the Government of India
that any intra state transmission project, which cost above a threshold limit, shall
be developed by the State Government through competitive bidding process and
the limit is to be decided by the State Electricity Regulatory Commissions. The
Chairperson informed that AERC, in consultation with the State Government and
AEGCL, has specified a threshold limit through a draft notification in January 2019.
He further informed that comments on the draft notification may be submitted within
31st March, 2019.
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vii. Shri S.N. Kalita MD, AEGCL informed that as directed by the Commission, the
Company has taken initiative to restructure and strengthen SLDC.
Agenda: Presentation on MYT Petitions for FY 2019-20 to FY 2021-22 by APGCL
APGCL made a brief power point presentation on MYT petitions for FY 2019-20 to FY
2021-22 along with true up for FY 2017-18 and Annual Performance Review for FY 2018-
19. The presentation of AEGCL is enclosed as Annexure II. The important points raised
by the participants during the course of the presentation are summarized below:
i) MD APGCL, Ms K. Baruah informed that the tariff proposed for Lakwa Thermal
Power Station (LTPS) for the MYT period starting with FY 2019-20 are Rs 5.31/unit,
Rs 5.66/unit and Rs 5.62/unit respectively. The proposed tariffs are the highest
among the APGCL power stations as special R&M has been proposed for the
Station which will require major overhauling.
ii) It was further informed by MD, APGCL that the new projects are being financed
from ADB as 90 % Grant and 10% loan while R&M of old plants are being financed
with State Government assistance. On a query from Shri Subodh Sharma, it was
further informed by Ms Baruah that APGCL may restructure the Company and
convert the capital grants to equity.
iii) The members expressed concern that the thermal stations of APGCL were unable
to generate to their installed capacity due to inadequate availability of gas and
important projects like Margherita Coal based project is yet to receive coal linkage.
Besides, commissioning of most of the ongoing projects of APGCL has been
delayed due to various reasons. They observed that if APGCL did not improve its
performance, the performance of AEGCL will suffer too. And the consumers also
have to bear greater cost of power through POC charges for power purchased from
outside the State.
Given the above scenario, all members agreed that the State Government has to
play a pivotal role in ensuring adequate gas availability and coal linkage for the
projects of APGCL, at the earliest.
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Agenda: Presentation on MYT Petitions for FY 2019-20 to FY 2021-22 by
APDCL
There was a short Power Point presentation from APDCL on the MYT petitions for
FY 2019-20 to FY 2021-22 along with true up for FY 2017-18 and Annual Performance
Review for FY 2018-19. The presentation of AEGCL is enclosed as Annexure III. The
following discussions took place during the course of the presentation:
i. APDCL informed that due to repeated persuasions against the POC charges by six
States including Assam, the Ministry of Power called a meeting to hear their
grievances. It was further informed that APDCL submitted their viewpoints on the
matter and requested that 80% of the fixed cost may be socialized instead of 20%
as is done now.
MD, AEGCL observed that only 26% of the PGCIL transmission capacity is being
utilsed and the rest 74% stands for reliability of the system and future use. He
therefore, suggested that 74% may be proposed as reliability cost of the network to
be equally shared by all users.
Chairperson AERC observed that if 50% of the charges are socialized and 50%
charged through POC, even then there will be some considerable reduction in the
transmission charges. .
ii. It was informed that for the first time Assam is receiving 50 MW RTC Wind Power
from projects in Tamil Nadu. APDCL has signed agreement with SECI and PTC and
Assam is receiving the power from 4th February, 2019. It was further informed that
APDCL would receive another 50 MW of wind power within this year. It was also
informed that the 3rd unit of NTPC Bongaigaon Thermal Power Station will be
commissioned shortly. Although, the price of this thermal power is high, APDCL will
procure the power as per PPA. APDCL informed that Assam will soon also receive
around 200 MW power from Mangdechu Hydro Electric project in Bhutan.
iii. The Discom informed that APDCL has been chosen the ADB Best Performing Utility
award for timely implementation of its projects under 2017 ADB loan 3200 IND. The
award would be given in October this year
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Agenda: Comment and suggestion of the Members
i. Shri Subodh Sharma offered the following suggestions –
a) Due to SAUBHAGYA, DDUGJY and other such schemes of the
Government of India, the domestic consumers are increasing at a faster
pace than any other consumer category. As such, increased sale to such
consumers also increases the distribution losses of the Company and
affecting its revenue. APDCL is expected to function as a commercial entity;
however, the peculiar consumer mix is preventing it from doing so. As such,
adequate subsidy from the State Government is essential.
b) Although, first financial restructuring of the distribution Company was
carried out years back and with signing of the UDAY scheme, another
restructuring is underway, APDCL is yet to draw up a master plan to bring
a commercial turnaround. The loss making utility must try to chalk out a
master plan as to what should be the tariff at which it can achieve a financial
turnaround, considering all the regulatory provisions and subsidies of the
State Government that is likely to be available. They must also consider the
investments required to bring the losses to the required level.
c) The three State Power Companies are symbiotically interconnected and in
the long run, success of one would depend not only on its own performance
but on the performance of the other two as well. Therefore, each Company
must try to build itself as a robust commercial organization.
Chairperson AERC stated that in every Tariff Order, the Commission sets
some parameters for achievement by the Companies. APDCL should make
all efforts to achieve the targets set in tariff orders like distribution loss,
collection efficiency, etc; so as to achieve a financial turnaround. The
Chairperson observed that technical loss in the system may be higher than
what is envisaged, in addition to commercial losses. A lot of investment in
distribution infrastructure is required to reduce technical loss and to have
an idea of these losses, the Commission is conducting the energy audit in
three Electrical Circles. The final report of this audit is likely to be submitted
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by the end of this year and then the Commission would be in a better
position to issue directions.
ii. Shri K. Medhi, General Secretary, NESSIA offered the following suggestions –
a) The proposed increase in fixed charges is very high while improved power
scenario is a matter of opinion and usually differs from place to place.
Instead of enhancing fixed charges, APDCL may conduct actual load
survey sub-division wise. This would help increase the connected load and
increase in fixed charges may not be necessary.
He requested the Commission to look into the above aspects before
allowing any enhancement.
b) Due to programmes such as SAUBHAGYA and DDUGJY, the performance
of APDCL is dwindling. He stated that AT&C looses have increased
substantially, collection efficiency has gone down even when the number
of connections have increased; and arrears increased compared to earlier
years. In view of the above scenario Shri Medhi suggested that
1. APDCL should try to enhance alternate and effective time tested
methods for revenue realization.
2. Adopt energy efficient technologies & equipments and encourage
consumers to do the same.
c) APDCL should encourage use of solar rooftops in the State and try to draw
the benefits of Central Government sponsored schemes for solar rooftops.
d) There are many ghost (non-existent) electricity consumers and if the arrear
of these ghost consumers are taken out, the balance sheet will be cleaner.
Shri Medhi opined that there is a presumption that 40% of the total arrear
is due to non-existent consumers.
Chairperson AERC assured that the suggestions would be considered
while taking any decision.
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iii. Shri Abhijit Sharma, Secreetary, ABITA made the following submissions –
a) He enquired regarding the status of providing dedicated feeders to the tea
gardens.
Shri Rakesh Agarwal, MD APDCL stated that an amount of Rs 20 Crores
were earmarked in the budget for installation of 11 numbers of dedicated
feeders. However, tendering for the purpose is in process.
He informed that from FY 2018-19, the process of financing of the State
government has undergone a massive change. Initially, whenever, funds
were allocated by the State Government, the entire fund was released to
APDCL and the money could be utilized. However, now, the State
Government gives an allocation in the budget, a DPR/ proposal has to be
submitted from APDCL, then administrative approval is received, then
tendering/ allotment of works have to be done, then it has to be uploaded
for financial sanction, and once the work is partially executed, only then the
finance is released just like a State Government Department. He observed
that due to this change in the process of release of funds, works are getting
delayed.
MD, APDCL informed that during the last year 14,000 smart meters were
installed in Guwahati as a pilot project and in January this year the
Company was able to generate bills for 11000 meters without any kind of
human intervention. He stated that technological interventions would make
services convenient for the consumers; however, this would not only
require the support of consumers but also massive investments. He
informed that APDCL is trying to bring investments through IPDS, ADB
Financing and the State Government.
b) While appreciating the endeavors of APDCL, Secretary, ABITA stated that
the tea sector contributed around 8% of the total revenue of the Company
amounting to approximately Rs 800 Cr. He explained that unless the supply
to rural consumers and the tea gardens are separated, power position in
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the tea estates is unlikely to improve as the quality of power available may
not be good enough for use in the tea gardens. As a result, the tea gardens
have to utilize their generators and power produced is costlier than the
power. from APDCL. While APDCL loses revenue, the tea gardens have to
pay greater cost of production.
c) Secretary, ABITA also observed that as directed by the Commission in the
last meeting, the Company can introduce Voluntary Disclosure of load
program from time to time where consumers can be asked to disclose their
loads. The Company may allow consumer to enhance their loads in a
hassle free way with very few documentation requirements.
MD APDCL informed that this is being done and about Rs 25 Cr additional
fixed charges are collected after the VDL scheme in October last year.
Chairman APDCL suggested that online facility for enhancement of load
should be made available.
d) Secretary, ABITA stated that with the ongoing works of SAUBHAGYA, all
the development works of APDCL has taken a backseat.
MD APDCL informed that some of the contractors involved in the
development schemes like ADB, IPDS were also chosen for implementing
the SAUBHAGYA scheme and since it is a time bound program, the
development works were somewhat delayed. However, he assured that he
and Chairman APDCL are personally reviewing the progress of every work
under the schemes, and lots of advancement in the works is expected in
the next couple of weeks.
It was informed from APDCL that online facilities were launched for new LT
connections, however, applications received through online facility are very
few. Therefore, as directed by Chairman, APDCL, the Company is planning
to facilitate only online applications for new connection for LT consumers
so that they get acquainted with the new systems. It was further informed
that online facility for new HT connections will be launched too, shortly.
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Shri Subodh Sharma observed that the electronic meters are equipped with
facilities to capture the maximum demand during the month and APDCL
can check if the contracted demand has been exceeded by any consumer.
Chairperson, AERC agreed to the suggestion and observed that the meter
readers are not taking such readings and may be asked to do so by the
concerned authorities. He noted that for HT consumers, it is being done
because if these consumers exceeded contract demand they were
penalized but for LT consumers, the same was not practiced. He further
observed that this practice will do away with the necessity for conducting
internal load survey by the Company, as has been proposed.
iv. Shri Saurav Agarwal, Chairperson, Power, FINER made the following observations:
a) As load enhancement is to be allowed online, load reduction should also
be allowed online once a year.
Chairperson AERC directed APDCL to look into the matter.
b) Cost of power is one of the highest. One of the factors contributing to this
is costly power from NTPC Bongaigaon Station. APDCL and the consumers
must raise their voice against such tariffs when the petitions are filed for tariff
determination in the Central Electricity Regulatory Commission. APDCL may
consider opening a separate Cell or assign competent officers with the
responsibility to voice these concerns in CERC. Recently, the draft MYT
Regulations has been notified and there was no representation from Assam.
APDCL can have a dedicated Cell to voice the concerns of the people of Assam
in appropriate Forums like CERC, whenever necessary.
It was clarified from APDCL that the Company has been submitting response
petitions before the CERC against NTPC tariff petitions and also contesting
these in the Appellate Tribunal. APDCL cited an example where the Kathalguri
station of NEEPCO had filed a petition before CERC requesting for reduction
in PLF stating non availability of fuel. NEEPCO stated the example of APGCL
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gas stations whose PLF were low due to non availability of gas. This is a recent
case where APDCL managed to win the case against NEEPCO.
Chairperson AERC observed that the consumers like FINER and ABITA may
also file petitions before the concerned forum.
Shri Subodh Sharma stated that an individual consumer residing in Delhi have
made representations to CERC against the NTPC petitions. However, he also
observed that this is a costly affair and large consumers like FINER and ABITA
should come forward.
c) In the last budget, the Government of Assam has announced 5% electricity
duty ad valorem on the total consumption which has increased the electricity
duty substantially for the industrial consumers.
Chairperson AERC opined that it is the policy decision of the State
Government.
d) A number of points have been raised by the Statutory Auditors on the
financial Statements of APDCL and requested the Commission to consider
those while determining tariff.
The Commission assured that all the points which are likely to impact the tariff will be
scrutinized before making a decision.
The Chairperson, AERC thanked the members for their suggestions.
Agenda: Discussions on Draft Regulations notified by AERC
Two draft Regulations namely Draft AERC (Electricity Supply Code) (First Amendment)
Regulations, 2018 and Draft AERC (Deviation Settlement Mechanism and Related Matters)
Regulations, 2018 were notified as previous publications as per Section 181 (3) of the
Electricity Act 2003 and public hearings were also held. These Regulations were circulated
among the Advisory Committee members. Chairperson, AERC requested the Members to
submit their comments on the Regulations, if any.
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There was no comment from any member.
Agenda: Any Other matter.
No other matter came up for discussion.
Chairperson, AERC assured the members that the MYT proposals of the utilities would be
prudently scrutinized and the valuable suggestions offered by each stakeholder would be
taken into account while determining tariffs for FY 2019-20 and Annual Revenue Requirement
for FY 2020-21 and FY2021-22.
The meeting ended with vote of thanks from the Chair.
Sd/-
Secretary,
Assam Electricity Regulatory Commission.
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ANNEXURE –A
24th Meeting of SAC - LIST OF MEMBERS & SPECIAL INVITEES PRESENT
MEMBERS
1. Shri Subhash Chandra Das, IAS (Retd), Chairperson, AERC.
2. Shri Dipak Chakravarty, Member, AERC
3. Smt. Utpala Saikia, Joint Secretary, Power Deptt., Government of Assam
4. Shri G.A Nayyar, Deputy Secretary, Finance Department, Government of Assam.
5. Shri Subodh Sharma, Consumer Activist
6. Shri Dilip Kumar Sarma, Sr. Consultant, NETC
7. Shri Abhijit Sharma, Secretary. ABITA
8. Shri Abhijit Kakati, MRK, ABITA
9. Shri Niladri Roy, Advocate, Silchar Bar Council
10. Shri A.K. Baruah, Advisor, AASSIA
11. Shri Sailen Baruah, President, NESSIA
12. Shri Kumud Medhi, Secretary, NESSIA
13. Shri P.K. Goswami, Former Director, Technical Education and Retd. VC, Assam
Science and Technology University
14. Shri Saurav Agarwal, Chairperson, Power, FINER
15. Shri Rajeev Goswami, DDG, FINER
16. Shri Champak Baruah, Ex- Member (Technical), APDCL.
17. Shri Arup Kr Mishra, Director, AEDA
18. Shri Pronip Kr. Barthakur, Ex Director, ONGC
19. Shri Birendra Kr. Das, President, Grahak Surakha Sanstha
SPECIAL INVITEES
1. Shri V.K. Pipersenia, IAS (Retd), Chairman, APDCL/AEGCL/APGCL
2. Shri Rakesh Agarwal, IAS, Managing Director, APDCL
3. Ms. Kalyani Baruah, Managing Director, APGCL
4. Shri Satyendra Nath Kalita, Managing Director, AEGCL